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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

Audit finds state can’t collect damages for Social Security mess

Audits


Between December 2006 and January 2008, state government suffered three breaches of privacy when Social Security numbers were exposed to the public. 

During January 2008, I blogged, “A third breach of privacy in just over a year also occurred this month with a portion of 5,000 taxpayers in northeastern Wisconsin having their Social Security numbers exposed in a state mailing. A folding error enabled some of the recipients' Social Security numbers to be seen in the windows of envelopes containing federal 1099-G tax forms.”

I remain unable to fathom a situation that it is necessary to publish the Social Security number of any recipient of a state service. The third breach of privacy that occurred earlier this year led to a review prepared by the state’s highly-regarded Legislative Audit Bureau (LAB).

Since April 2008, state law has directed the LAB to establish a toll-free hotline to take reports of fraud, waste, and mismanagement in state government and to investigate reports received through the hotline. The LAB  started its investigation of the January 2008 breach of privacy in response to complaints that the state Department of Administration (DOA) had not used proper oversight of contract staff provided by Spherion for print and mail services. Complaints raised questions about workplace safety, a hostile work environment, and false billing hours. DOA reported that Spherion staff failed to notice the folding error that led to up to 5,000 tax forms mailed with Social Security numbers visible through envelope windows.

One of the LAB’s findings is unfortunate. The LAB discovered that the state’s contract with Spherion did not include any provisions to collect damages for instances like the breach of privacy.

The LAB writes, “The contract had no specific liquidated damage provisions, and DOA did not elect to pursue breach of contract damages from Spherion to pay the cost of addressing the security breach, including the cost of credit monitoring for affected taxpayers. DOA noted that it was not appropriate to require Spherion to pay for credit monitoring because it believes Spherion’s overall performance has been satisfactory and the number of documents affected represented a small percentage of the total number processed.”

As for preventing future blunders, the LAB writes, “DOA indicated that it has developed standard contract terms and conditions related to imposing liquidated damages and requiring contractors to pay the costs of security breaches for which they are responsible. It plans to encourage state agencies to incorporate these provisions into future contracts, where appropriate.”

The state’s contract with Spherion expires June 30, 2009, and DOA has begun a process to solicit bids during October or November of this year. The LAB calculates as much as $616,500 could be saved in the five-year period from fiscal year 2009-2010  through fiscal year 2013-2014 if state staff filled all print and mail positions currently filled by contract staff.

The LAB recommends that if DOA continues to contract for some or all print and mail staff in the future, billing procedures should be formalized, contractors should be prohibited from billing for time new staff are trained, and contracts should include standard provisions for damages if private information is disclosed.

The LAB did not substantiate any complaints about workplace safety, a hostile work environment, and fraudulent time recording by contract staff.

Here is the complete LAB report. 

I commend the LAB for another outstanding review on behalf of Wisconsin taxpayers.

New law requires carbon monoxide detectors

News you can use


Carbon monoxide poisoning is one of the leading causes of accidental death in America.

A new Wisconsin law went into effect October 1, 2008 that requires carbon monoxide detectors be installed in most new residential construction units as of that date. The units include tourist cabins, bed and breakfast establishments, and any public building used for sleeping or lodging, such as hotels, motels, condominiums, apartment buildings, dormitories, fraternities, sororities, convents, seminaries, community-based residential facilities, and home shelters. Hospitals and nursing homes are exempt.

The law requires that the detectors be installed in existing residential buildings of the types mentioned above by April 1, 2010. 

Carbon monoxide is without odor or color, making it difficult to realize when it has become a problem. Low levels of carbon monoxide poisoning can be confused with flu symptoms, food poisoning or other illnesses. If untreated, the symptoms can lead to long term health problems. Symptoms of low levels of carbon monoxide poisoning include shortness of breath, mild nausea, and mild headaches. Moderate levels of exposure can be fatal if symptoms such as headaches, dizziness, nausea, and light-headedness persist. High levels can cause death in a matter of minutes.

To help those suffering from carbon monoxide poisoning, get them outdoors immediately, or open all doors and windows. Get them to a hospital or emergency room as quickly as possible.

I voted in favor of Senate Bill 289 that was approved by the Legislature and signed into law. Here is a Legislative Council memo about Senate Bill 289 and details about the enacted law.

Wisconsin taxpayers lose in Ho-Chunk settlement

Gambling, Taxes


Wisconsin’s dispute with the Ho-Chunk Nation might be over after a four year battle, and Wisconsin taxpayers got the short end of the stick in the gambling compact settlement.

The Ho-Chunk stopped making payments to the state in 2004 after signing a compact with Governor Doyle in 2003. The tribe argued that because a 2004 state Supreme Court ruling invalidated a similar compact agreement with the Forest County Potawatomi, it owed the state nothing.

Since 2004, Ho-Chunk halted payments with the exception of a one-time $30-million payment during 2006 it claimed demonstrated good faith bargaining. Here are the details of the recent settlement that should have taxpayers quizzically shaking their heads wondering, is that all there is?

The state contended the Ho-Chunk owed $72 million. Ho-Chunk has agreed to pay $60 million. That is a $12 million jolt to Wisconsin taxpayers.

Terms of the old compact had the Ho-Chunk paying the state a six percent tax of its take. Under the new compact, the Ho-Chunk will make payments of five percent if net earnings are below $350 million and 5.5 percent if earnings exceed $350 million. The reduced percentage means a loss of millions of dollars to the state. By contrast, the Potawatomi pay 6.5 percent of winnings.

The new compact also allows the Ho-Chunk to make reductions in their annual payments to the state:


  • Beginning May 1, 2010, the tribe can deduct payments made to counties totaling $1,000 for every acre of land owned by the U.S. government in trust for the tribe located within each county’s jurisdiction in July, 2003. The LFB informs me that during July 2003 the Ho-Chunk had approximately 2,300 acres of trust land that could result in a reduction in their annual state payment of $2.3 million.
  • During a 10-year period from May 1, 2009 to May 1, 2019, the tribe could deduct the amounts it paid for public works projects that benefit both the tribe and the state. Deductions would be limited to no more than $1.0 million in any one year and the total deductions for the period could not exceed $5.0 million. That means there could be an average annual deduction of $500,000.
  • The  tribe can also deduct any additional amounts paid by the tribe for projects that the state and the tribe agree provide a substantial public benefit in areas of economic development, infrastructure, health, safety, or welfare. These deductions would begin May 1, 2019, would be limited to a total of $4 million, with annual deductions limited to a maximum of $1 million. 

 

The casinos are arguably some of the most lucrative, profitable businesses in Wisconsin, yet their payments to the state are questionable. I asked the non-partisan Legislative Fiscal Bureau (LFB) to prepare a memo that provides information that compares the imposition of the state corporate income and franchise tax, general sales tax, and local property taxes on private businesses to tribal casino operations in Wisconsin.

The LFB writes a “tax rate of 7.9 percent is applied to Wisconsin net taxable income to determine gross tax. The annual payment negotiated with the Ho-Chunk Nation is five percent of net win (5.5 percent if net win is greater than $350 million). Since net win generally does not include deductions used in determining net income, the net-win amount is likely larger than would be the case if the Ho-Chunk Nation casino was subject to the state corporate income and franchise tax. In addition, corporate income and franchise taxes can be offset by state tax credits. However, the corporate income and franchise tax rate is 7.9 percent which is higher than the 5.0 percent or 5.5 percent rate applied to net win.”

On the matter of the sales tax, the LFB writes, Due to restrictions in federal law, the state sales tax is not imposed on purchases or leases of otherwise taxable items by the tribes for use in the casinos. In addition tribal gaming proceeds generally are not subject to the sales tax. Sales of lodging, food and beverages, and admissions to the entertainment events at the casino are taxable if the purchaser is not a member of the tribe that is operating the casino, but exempt if the purchaser is a tribal member.”

Finally, on property taxes, the LFB writes, “Casinos owned by Native Americans are exempt from the property tax.”

To re-cap, Wisconsin businesses pay a higher tax rate than the rate Ho-Chunk and other tribes pay the state from their earnings. The tribes do not pay sales taxes or property taxes.

At first blush, the amount of the payments being made to the state through negotiated compacts may sound sizeable. However, there are significant societal costs due to gambling.

Serious problem gamblers lose or quit their jobs, steal money to support their gambling habit, think about and actually plan suicide, and some even make suicide attempts. Children of problem gamblers develop behavior and adjustment problems suffering from depression, anxiety, and cynicism.

The Wisconsin Council on Problem Gambling Helpline Executive Director Rose Gruber says the average debt of callers to her hotline during 2007 was $43,000, up from $37,000 during 2006. Wisconsin has over 332,000 serious problem gamblers reported during 2007, up from 265,000 the previous year.

A Wisconsin Policy Research Institute study in 1996 reported the average serious problem gambler imposed costs close to $10,000 upon Wisconsin each year with a total annual social cost impact of over $307 million. The same study reports the average serious problem casino gambler imposed costs of over $10,000 upon Wisconsin each year with a total annual social cost impact of over $138 million.

The Ho-Chunk’s deal with the state can be renegotiated after 25 years. Meanwhile, for the next two and half decades, the Ho-Chunk can offer Las Vegas-style games at its casinos in Baraboo, Black River Falls, Nekoosa and Tomah. It operates a bingo parlor in Madison and a new casino is scheduled to open in Wittenburg in October.

Governor Doyle negotiated a deal that brings in less money at a smaller percentage to the state and allows huge expansion of gambling in the state.  

Congratulations to the New Berlin Lioness Club on their 50th anniversary!


I am proud to be a member of the New Berlin Lioness Club.  It was a very special and heartwarming celebration of the Club's 50th Anniversary Sunday evening.  A nostalgic display of items over the last 50 years was an amazing walk through history at Klemmer's Banquet Center.  The photographic appearance of the Lion's Corn Roast stand of yesteryear was a sight for a lot of smiles.  The New Berlin Lioness Club conducts fundraisers at the Lion's Wisconsin State Fair Corn Roast, at Fourth of July activities, and a special champagne breakfast every April. Money raised at these special events goes to numerous worthy causes. 

I had the honor of presenting a state citation to the New Berlin Lioness Club at a ceremony Sunday, October 5, 2008. The citation reads:


WHEREAS, The New Berlin Lioness Club, chartered as the New Berlin Lionettes July 8, 1958, and as the New Berlin Lioness Club September 30, 1977, celebrates fifty years of service; and

WHEREAS, New Berlin Lioness Club members through volunteerism, dedication, and commitment maintain ongoing support for club projects that secure funds to enhance others lives; and 

WHEREAS, New Berlin Lioness Club members maintain a history of outstanding service at the Club’s noteworthy projects of Champagne Breakfast, Fourth of July, Wisconsin State Fair, and numerous other projects; and 

WHEREAS, The New Berlin Lioness Club has secured and donated significant monetary sums to numerous Lion projects and community projects including, Lions Camp at Rosholt Wisconsin, Leader Dog, Hearing Fund, Sight Conservation, Youth Exchange, Blind Outdoor Leisure Development, Campaign SightFirst II, the Eye Bank, Center for the Blind and Visually Impaired, Badger Association of the Blind, Wisconsin Council of the Blind, Wisconsin Braille, City of New Berlin Police, Fire, Library, Park and Recreation, Fourth of July Commission, New Berlin Veterans Memorial, New Berlin Historical Society, New Berlin Scholarship Fund, New Berlin Senior Taxi, Waukesha Women’s Center, Waukesha County Mental Health Association, Cancer Society, American Diabetes Association, Red Cross, The Association for the Rights of Citizens with handicaps, Interfaith, Special Olympics, and numerous other projects and programs; and,
 

WHEREAS, New Berlin Lioness Club members, past and present, share a bond and camaraderie induced by service and friendship; now

THEREFORE, the members of the Wisconsin State Senate, on the motion of Senator Mary Lazich, congratulate The New Berlin Lioness Club on their fiftieth anniversary.  The Wisconsin State Senate further thanks and commends The New Berlin Lioness Club for fifty years of outstanding dedication and service to New Berlin and to the State of Wisconsin.

Information session Thursday about roundabouts

News you can use, Roundabouts


I will be one of the moderators at a Wisconsin Department of Transportation (DOT) public information session on the proposed $6.5 million reconstruction of the Interstate 43/Racine Avenue interchange. The session will be held Thursday, October 9, 2008 at Muskego City Hall,
Muskego Room, W182 S8200 Racine Avenue  from 6 to 9 p.m. A formal presentation about the project will be given by the DOT at 7 p.m.

The project includes reconstruction of Racine Avenue from College Avenue to Julius Heil Drive, ramp reconstruction, a new deck for the Racine Avenue bridge over I-43 and two roundabouts to be constructed for the on-and off-ramps of the freeway. Work will begin during April 2009 and is projected to be completed during November 2009.

Recently, I spoke with DOT Project Development Chief John Oimoen about my concerns with roundabouts including about markings, lane size, diametric configuration, and the overall ability of drivers to maneuver safely. Oimoen told me a lot of time was spent by the DOT addressing the design of the Moorland Road roundabout in New Berlin. The DOT had difficulty with the roundabout because of construction going on at the same time at I-94 and Moorland.

Oimoen insisted that the ability of semi trailers to negotiate the roundabout was taken into consideration in the design process and that the roundabout is equipped to handle traffic volume for the next 25-30 years. He said quite a bit of sophistication goes into a roundabout’s design, followed by a critical review done by an independent peer group.

I repeated the suggestion I made to the DOT’s Southeast Region Director DeWayne Johnson that the DOT should bring together special study groups of designers, engineers, and importantly motorists to determine the best model for roundabouts. I have asked the DOT to conduct simulations with a cross-section of Wisconsin drivers and cross-section of vehicles before proceeding further with roundabouts.

When the DOT holds its information session Thursday in Muskego, I told Oimoen that I wanted the format to be an open microphone meeting that would allow concerned citizens to directly voice their questions, comments, and concerns. Oimoen refused, saying the meeting would turn into a debate. I then suggested that citizens in attendance be allowed to submit written questions because the session should not be a one-way communication where the DOT simply states what it intends to do. Oimoen thought the suggestion was a fair and good idea and agreed to written questions from the audience. Oimoen and I will serve as the moderators for the meeting.


WHAT: Wisconsin DOT information session about reconstruction of the Interstate 43/Racine Avenue interchange

WHERE: Muskego City Hall, Muskego Room, W182 S8200 Racine Avenue, Muskego

WHEN: October 9, 2008 from 6 to 9 p.m. DOT presentation 7 p.m.


Previously, I blogged that the DOT should take a slower approach toward its philosophy to blanket the state with roundabouts.

Congratulations: Greendale, you’re in glorious full bloom!

Good news from Senate District 28



During June, I blogged that one of the great communities that I represent in Senate District 28, Greendale, was participating in this year’s America In Bloom competition. America In Bloom is a national campaign and contest devoted to promoting beautification and community involvement through the use of trees, plants, flowers, and other environmental enhancements. I am happy and proud to report that Greendale is the America in Bloom winner in the 10,001-15,000 population category! 

Village of Greendale President John Hermes and Greendale Park and Recreation Director Jackie Schweitzer travelled last week to Columbus, Ohio to attend the National America in Bloom Symposium and got the exciting news about Greendale’s impressive victory.

During the 7th Annual Competition held this past summer, Greendale went up against communities of comparable size across the United States. Judging was conducted in eight categories: floral displays, environmental awareness, landscaped areas, tidiness, urban forestry, heritage preservation, turf and groundcover areasand community involvement.

Greendale residents cleaned up neighborhoods, planted flowers at schools, held garlic mustard pulls, and raised funds to place trees at schools. The hard work and community-wide commitment paid off.

Greendale received the National Criteria Award in the Urban Forestry category, a competition involving all participating 30 communities in all population categories. The Urban Forestry award is given after communities are judged on municipal policies, bylaws, and regulation plans; distribution of trees, variety, suitability; new plantings, main street programs, new survey developments; preservation of heritage trees, woodlots, and re-planting procedures; and proper maintenance practices. Within Greendale’s population competition, the village received special recognition for their heritage preservation and was selected as the community of the year.

Greendale compiled outstanding scores. To achieve the 5-Bloom Award, a community must receive a score in each category of at least 90 points out of a maximum 125. Here is how Greendale scored in the various categories:

Tidiness (112); Environmental Effort (112); Community Involvement (119-isn't that awesome!!); Heritage Preservation (118); Urban Forestry (118); Landscaped Areas (116); Floral Displays (112) and Turf & Groundcover Areas (109).

That is truly amazing! Greendale scored 5 for 5 in 5-Bloom awards!

Greendale America In Bloom co-chair Mary Helen Block says a community celebration is in the works, to be held either sometime soon, or the village may wait until spring blooms next year.

I congratulate the entire Village of Greendale for your award-winning efforts and bringing wonderful civic pride to your community. It is an honor to represent Greendale in Senate District 28!

Here is more information from GreendaleNOW.

More concerns raised about roundabouts

Roundabouts


A respectful audience turned out Thursday night at a state Department of Transportation (DOT) information session at Muskego City Hall about roundabouts. The proposed $6.5 million reconstruction of the Interstate 43/Racine Avenue interchange  includes reconstruction of Racine Avenue from College Avenue to Julius Heil Drive, ramp reconstruction, a new deck for the Racine Avenue bridge over I-43 and two roundabouts to be constructed for the on-and off-ramps of the freeway. Work will begin during late April or early May 2009 and projected to be completed during November 2009.

Thursday night’s crowd in Muskego may not have been as large as the one that attended a recent DOT information session in New Berlin, but residents once again expressed concerns about roundabouts planned for their community. Following a discussion by Mark Lenters of Ourston Roundabout Engineering, citizens posed questions.

One resident asked specifically about speed limits.  Mark Lenters responded that there would not be posted speed limit signs at or inside the roundabouts.  Instead, signs for the roads leading to the roundabouts will govern the speed limit. Lenters said the geometry of the roundabouts slows people down, and that the average speed for roundabouts is 15-20 miles per hour.

When the citizen asking the speed limit questions reacted, stating a concern about increased accidents, Lenters responded that roundabouts are not perfect, but they are safer. The citizen submitted that just as much emission of greenhouse gasses will occur at roundabouts as at controlled intersections. Lenters answered that though it would seem that way, studies show otherwise. Lenters concluded his answer saying that roundabouts are worth any delay in traffic if they save lives.

There were also questions raised about snowplows, tractor-trailers, combines and their ability to negotiate the circle.  Mark Lenters said roundabouts are designed that tractor-trailers driving the inside lane may drive over the lines and toward the median of the roundabout.  Residents that use the area planned for roundabouts daily are also concerned about the construction schedule and the effect on homeowners and businesses in the surrounding area.

I asked Mark Lenters whether the proposed Muskego roundabouts would be like the questionable design of the roundabout at 1-43 and Moorland Road in New Berlin in that motorists will be confronting a roundabout with access coming off an expressway, and theater, restaurant, or other commercial traffic in close proximity. Lenters said no, and I told him that while the proposed Muskego roundabouts are not likely to be as problematic as the one in New Berlin, the feedback I have received on this issue from constituents is overwhelmingly negative.

I also asked about legal issues raised by the disabled and their concerns about roundabouts and the Americans with Disabilities Act. Lenters was aware and conceded that visually impaired have obvious difficulties and that signals must be placed at roundabouts, not all of them, but where requests have been made by blind residents living near, and impacted by, such roundabouts.

Prior to Thursday night’s information session, I spoke with a state transportation official in neighboring Illinois. I was informed Illinois removed their traffic circles in the 1940’s and are cautionary with roundabouts because of design concerns. During our conversation, the Illinois official explained that roundabouts increase safety; however, they are very sensitive to small changes in design.  He explained that roundabouts must be properly designed and that design knowledge and expertise about small changes is in very few hands.  He said the information is not in books, and not available to learn, one has to learn about designing roundabouts from someone that knows the knowledge.  He mentioned proper design depends on not having stoplights nearby.   He said that stoplights create platoons of traffic and that roundabouts work best with an even flow of traffic. He mentioned Barry Crown of the United Kingdom. Crown is considered the world’s best authority on roundabouts.  I asked Mark Lenters whether he had ever heard of Crown.  Lenters smiled and said, “He’s my mentor.” The Ourston Roundabout Engineering website says, “Lenters began collaboration in 1999 with Barry Crown of England, the best roundabout designer in the world, and in 2002 with Leif Ourston, the most experienced roundabout designer in the United States.”

Lenters spoke about a roundabout disaster in Clearwater Beach, Florida. Lenters’ mentor, Barry Crown wrote about it in a response to the Wall Street Journal during January 2002. Buried in Crown’s article is this line:

“The lesson to be learnt is not that roundabouts are bad for the US, but that design faults lead to failure while good design produces roundabouts that are safer than any other type of at-grade intersection in the United States.”

Brown says, “Design faults lead to failure.” Precisely, I continue to have serious concerns about the design at the Moorland Road roundabout in New Berlin.  Some roundabouts are not ready for prime time and the state should slow down the pace of its construction plans so that designs can be improved, particularly at locations similar to Moorland and I-43. Maybe it would not be a bad idea to consult with Mr. Crown about Moorland and I-43 and any other planned roundabouts that are near commercial development and have stoplights nearby.  Single lane roundabouts seem to function much better than dual lane roundabouts.

The state DOT has offered to work with me about signage and I appreciate that; however the DOT position is clear. Though staff are friendly and responsive, their standard answers seem to be that roundabouts are safer, studies prove it, more education is needed, they will take time, motorists have to be patient, and in time they will grow to accept and appreciate roundabouts. Thus far, the DOT’s efforts to reassure have not been very persuasive.

UPDATE: Agreement needed to expand Wisconsin's booming cranberry business

Business


I am happy to update a recent blog that means great news for one of the state’s largest industries. 

Cranberry producers have come to an agreement with the Wisconsin Department of Natural Resources and the U.S. Army Corp of Engineers to streamline the permitting process for cranberry bogs. The agreement is significant, clearing the way for the creation of as many as 1,115 jobs and a $75 million impact on Wisconsin’s economy.

Here are more details from the Wisconsin State Cranberry Growers Association
and the Wausau Daily Herald.

Governor predicts $3 billion deficit


Governor Doyle says the state budget deficit could be as high as $3 billion in the 2009-11 state budget if the economy doesn’t turn around. Doyle spoke at a news conference this afternoon in Madison.

Doyle said tax collections are coming in at only 0.4 percent, with September tax collections down in every category: sales tax, income tax and corporate tax.

Doyle also said every area of state spending is on the table for possible cuts in the next state budget, and has ordered department heads to chop another 10 percent from their operating budgets.

My message has been consistent for some time that the state has been flirting with financial chaos by over-spending and over-taxing. A potential $3 billion deficit is proof that by refusing to engage in fiscally responsible budget-making, Wisconsin could face the most serious budget crisis in its history.

If you like to bike…

News you can use


Are you riding a bike more often because of the price of gasoline? You’re biking in the right place. The League of American Bicyclists ranks Wisconsin as the second best state in the country for biking.

To compile the rankings, the League examined quality roads, safety, use of available federal funding and policy favorable to cyclists. Wisconsin bikers also enjoy some of the nation’s finest outdoors, with pristine water, clean air, and fabulous scenery making, all making for a most pleasant ride.

Here is a guide to Wisconsin trails and a Wisconsin biking video.

Enjoy your ride!

Wine consumers benefit from new Wisconsin law

News you can use


Wisconsin
consumers will now have greater ease at purchasing wines under a new winery-to-consumer shipping law that went into effect October 1, 2008. The law will allow wineries to purchase permits for $100 and ship up to a dozen cases of wine per person per year.

Wisconsin had been one of only three reciprocal shipping states that had allowed only wineries in participating states to make shipments. When states converted to permits, Wisconsin consumers experienced difficulty finding wines under the old law. Now, all U.S. wineries will be eligible under Wisconsin’s permits. Consumers will no longer be limited to purchases from a handful of states as a winery in any state may ship wine directly to a Wisconsin resident once the winery has received a direct wine shipper permit from Wisconsin.

This is a common-sense, reasonable, pro-consumer law that complies with regulations while supporting Wisconsin’s own growing wine industry. One of the other provisions of the new law requires that all sales to retailers go through a wholesaler.

Here is a Wisconsin Legislative Council memo on Senate Bill 485 that was approved by the Legislature and signed into law during March 2008.

Since when is it okay...


For teachers to talk about same-sex marriage and abortion to underage students in the guise of civic election education?

Wisconsin incomes behind the rest of the nation


I have blogged extensively about taxes and their relationship to Wisconsin incomes, some of the lowest in the country. Wisconsin’s ability to compete continues to decline
 as hard-working residents pay more and more of their income to the government.

More grim news from the non-partisan Wisconsin Taxpayer’s Alliance (WISTAX) demonstrates that this gloomy pattern continues. WISTAX reports, “Wisconsin’s economy has been lagging the nation for some time. A simple indicator of state economic performance is personal income, which includes wages, government payments, and investment earnings. During 2006, total state income rose 5.4% to $191.7 billion, while national growth was 7.1%. Reflecting the economic slowdown, 2008 personal income is estimated to increase 3.4% in Wisconsin vs. 4.3% nationally."

Here is the WISTAX release. 

Next year, the governor and the Legislature will conduct their most important piece of state government business: crafting and adopting the next biennial budget. With Wisconsin incomes struggling to keep pace with the nation as a whole during rough times, it is imperative the state holds the line on spending and rejects any tax increase proposals.

Antlerless hunting season has begun


The four-day antlerless deer hunt is underway in Wisconsin. The Department of Natural Resources has a positive outlook, calling the herd “healthy and abundant.” 

Be safe, hunters!

Your lottery property tax credit could be smaller this year


There will be less money available for the lottery property tax credit this year in Wisconsin. According to the Wheeler Report, the Department of Administration has informed the Legislature’s Joint Finance Committee that $119,993,410 will be available for distribution to Wisconsin homeowners this December.  The figure is $9.6 million less than last year’s total.

The amount available for the lottery property tax credit is determined by the gross revenues from the state lottery including ticket sales, retailer fees, and other operating revenues.  The average credit for 2008 will be determined after November 1, 2008 by the Wisconsin Department of Revenue.

Last year’s average credit was $85. The largest credit was $167 during 1992-93 and the smallest credit was $52 during 1998-99.

Pro-choice, but not about light bulbs


There is great concern about the safety of fluorescent light bulbs given that the United States is phasing out the use of traditional, incandescent light bulbs and mandating the use of fluorescent bulbs. Most Americans fail to realize their choice of light bulbs has already been made in Washington.

Part of the Energy Independence and Security Act of 2007 approved and signed into law last year calls for a phasing out of traditional light bulbs beginning in 2012 leading to an all-out ban in 2014 in favor of energy-saving compact fluorescent bulbs or CFL’s. CFL’s contain dangerous mercury. When the bulbs are broken, the mercury escapes into surroundings and must be handled with extreme caution.

Blogger John Lott and others wrote about the story of a Maine woman and her terrible experience with a broken CFL. A Maine Department of Environmental Protection employee came out to her home to check for damage and then suggested to the woman that she call in a firm that turned out to be a clean-up process costing over $2,000.  

Since this well-publicized account, other stories have reported that it is unnecessary for an environmental clean-up firm to respond to a broken CFL. Even so, pray you never break one in your home. The measures to take suggested by the state of Maine, the site of the above-mentioned story, pose one hassle after another.

During March 2008, two dozen members of the House, including Wisconsin Congressman Jim Sensenbrenner introduced the Light Bulb Freedom of Choice Act. The act repeals the portions of the Energy Independence and Security Act of 2007 that mandate the use of CFL’s unless the comptroller general can offer a report that finds specific financial benefits of using the bulbs, environmental benefits achieved by their use, and evidence that addresses concerns of mercury threats from CFL’s.

On March 14, 2008, the Light Bulb Freedom of Choice Act was referred to the House Subcommittee on Energy and Air Quality. Seven months later, the committee, controlled by Democrats, including committee member Tammy Baldwin (D-WI), has yet to schedule a hearing.

I find it amazing pro-choice Democrats refuse to let Americans decide what kind of light bulbs they want in their own homes.

Wisconsin school trends


Nearly two-thirds of Wisconsin school districts have experienced enrollment declines in the past ten years. Despite the drop in enrollment, school spending continues to increase. Wisconsin schools spent almost $10 billion last year with 58% going for actual instruction.

These are some of the findings in a report on school trends by the nonpartisan Wisconsin Taxpayers Alliance.

Read more

The Wisconsin State Journal gets it, for the most part


With Governor Doyle predicting a $3 billion deficit in the next state budget, I wholeheartedly agree with positions stated in a Wisconsin State Journal editorial.  The newspaper is right on writing:


"The conclusion is simple: State government has desperately been trying to live beyond its means.

It's time to stop.

It's time to recognize that to put together a sound state budget for the next two years, the governor and lawmakers need a dose of fiscal reality.

They need to get far more serious about setting priorities. The state can no longer afford everything at once…. fee and tax increases should be viewed skeptically. With recession threatening, taxpayers simply cannot afford to contribute more.”

I disagree with this statement in the editorial:

“To be sure, officials should also aim to maximize the state's revenue. Joining the multi-state Streamlined Sales Tax Project to help collect sales taxes from online and catalog sales should be an obvious choice. These are taxes the state is owned but is now unable to collect.”

The Streamlined Sales Tax would be another big, unaffordable tax increase. 


The Wisconsin State Journal editorial comments about it is time to stop are correct and should be taken to heart by Governor Doyle and every state legislator.

Predictions of an error-filled Election Day appear to be true


On February 4, 2008, I agreed with a gloomy election forecast from Dr. Robert A. Pastor, director of the Center for Democracy and Election Management at American University in Washington, DC. I wrote the following:

Pastor says the majority of states have failed to adopt or even embrace reforms that would restore confidence and trust in America’s flawed election system. As a result, Pastor says problems with this year’s elections are inevitable.

The biggest problem according to Pastor will be voter registration lists. The Help America Vote Act (HAVA) of 2002 gave the states until January 1, 2006 to complete integrated, interactive lists. A few states have yet to comply. There has not been a thorough review to determine the quality of the lists. So a number of problems are still likely to occur in this year’s primary and general elections. Pastor also points out ‘about one third of the states have bottom-up databases that rely on counties and municipalities to retain their own registration lists and submit information to the state rather than the other way around. In contrast, top-down lists typically deliver information in real time.’

There are problems with new computerized systems that have replaced archaic punch card and lever voting. A paper trail is necessary in the event of recounts, but Congress has failed to fund and provide voter-verified paper-audit trails. Some states are so concerned that they are thinking about dumping their electronic voting systems in favor of a paper system prior to the November election.”

The Washington Post is reporting that due to mix-ups in voting systems around the country, thousands of eligible voters will be forced to re-establish their eligibility. This November is shaping up to be the most mistake-riddled Election Day in American history.

Wisconsin has potential for major voting problems

Photo ID


That’s the assessment of a new report by the Pew Center on the States on electionline.org. A record number of
voter registrations and predicted high turnouts will put heavy pressure on various voting systems around the country that continue to be plagued by glitches.

The report, “
Election Preview 2008: What if We Had an Election and Everyone Came?” sums up Wisconsin:

”The statewide voter registration database was finally completed and made compliant with federal law over the summer, two years later than planned. However hiccups still emerged when the state started matching voter information with information in the department of motor vehicles database and found one in five records did not match due to issues such as typos, transposed letters or numbers, or using middle names for one record but not the other. And as
in several other battleground states, there has been partisan fighting over voter eligibility and allegations of fraudulent voter registration forms being submitted.”

Nationally, the report describes America’s voting system as one that, “while still in flux with a host of changes since 2001, will, ready or not, face its greatest challenge in a high-stakes contest with massive turnout.” Here are some of the concerns raised in the report:

1) There has been a huge increase in voter registrations. How the information was gathered has come into questions with labor unions, community groups, advocacy organizations and others coming under heavy scrutiny.

2) Eligibility for college students, especially those who come to universities from out-of-state, has raised eyebrows.

3) Election Day registration is available in eight states, including Wisconsin. The surge in voter registrations makes the timeliness of registration-application processing an issue.

4) As a safety net, voters who believe that they are registered or fail to present proper ID are given d provisional ballots as required by the Help America Vote Act, HAVA. However, there is no uniformity among the states. More than half of the states require voters to be in the correct precinct to have their provisional ballots eligible for counting.

5) Record numbers of provisional ballots are predicted. In close races, decisions to accept or reject ballots could be pivotal to election outcomes.

6) Military personnel and civilian citizens abroad sill face problems, including relying on slow and/or unreliable foreign mail services and  rules that can require witnesses or difficult-to-find notaries to substantiate ballots.

Stateline.org has an article on the report. 

You can read the lengthy report here. 

Read my previous blogs on this issue:

Predictions of an error-filled Election Day appear to be true 

A Photo ID requirement is not the problem in our election system 


Congratulations Franklin and Northwestern Mutual Life!


Today marks the exciting ribbon-cutting ceremony at Northwestern Mutual Life’s expansion project at its corporate campus in Franklin. The $85 million, six-story expansion at the 230,000-square-foot facility will have the space to add 1,100 employees.

The Northwestern Mutual Life Insurance Company (NML) is one of the most prestigious and successful firms in all of Wisconsin, in business for more than 150 years. A solid company with over $1 trillion of life insurance, NML can boast having the highest available ratings for insurance strength from all four major rating agencies: Standard & Poor's, Fitch Ratings, A.M. Best and Moody’s.

FORTUNE Magazine has recognized the strength and stability of NML, designating it “America’s Most Admired” company in the life/health insurance industry for 25 years. NML has been included in the FORTUNE survey of top industry professionals and analysts every year, and is the only company to lead its industry every year of the survey.

Franklin is an ideal location for NML to expand. Despite a rough economy, Franklin continues to beat the odds through prosperity and growth. I appreciate representing Franklin in state Senate District 28 and I congratulate NML and city of Franklin officials for this marvelous achievement.

Public meetings scheduled on Zoo Interchange work

News you can use


The Wisconsin Department of Transportation (WisDOT) is conducting undertaking an environmental and engineering analysis of the Zoo Interchange, the connection between I-94, I-894 and US 45 in western Milwaukee County near the Milwaukee County Zoo, through the end of 2009.The interchange is one of Wisconsin's oldest interstate interchanges, the busiest interchange in the state.

Refined modernization alternatives for each leg (north, south, east, west) and the core of the interchange will be presented at public meetings at the end of this month. Details are contained in the following release I received from the DOT:


Project progress

Over the past 10 years, the Wisconsin Department of Transportation (WisDOT) and the Southeastern Wisconsin Regional Planning Commission (SEWRPC) have completed a number of studies and analyses that consistently concluded that improvements to the Zoo Interchange are necessary. Recently WisDOT has collected and analyzed data to show current and future traffic scenarios.

Based on the initial results of the traffic analysis and the input received at the January 2008 open house workshops, the Zoo Interchange Team developed seven design concepts for public review and comments. Seven concepts, including the “no build” or “replace in kind” alternative, were presented at public information meetings in May. Nearly 500 people attended the May public information meetings and provided valuable input and ideas on the alternatives. The seven alternatives were further evaluated for traffic operations and impacts to local and environmental features.

Result: The traffic analysis concluded that spot improvements alone would not adequately address congestion and safety issues in the Zoo Interchange corridor. The spot improvement alternatives also did not address the outdated design issues including left hand exit and entrance ramps. At the conclusion of this analysis, and based on comments received from the public, the Zoo Interchange Team determined that the “spot improvement alternatives” would be screened out from further study and the modernization alternatives” should be analyzed further. The “modernization” alternatives feature a multi-level system interchange with right side exits and entrances. This design reduces weaving maneuvers and provides safer operations.

Alternatives to be presented at the October public meetings

The study team will present alternatives for each leg (north, south, east, west) of the project. The alternatives for each leg can be mixed and matched with alternatives of similar lane-width to fit the preferences and needs of the community. The alternatives presented will include the “replace-in-kind” alternative.

The maps and displays will show increased detail of where the new right-of-way lines may be located. Also, there will be artistic drawings to show how the freeway may look, and an electronic “fly over” to illustrate how traffic will flow with the different interchange designs.


What happens next

• October 2008 - The design concepts will be refined and presented in more detail at public information meetings.
• October 27, 2pm-7pm, Tommy Thompson Youth Center at State Fair Park
• October 30, 4pm-8pm, Wauwatosa West High School Cafeteria

• 2009 - A preferred design will be selected, and hearings will be held on the Draft Environmental Impact Statement
• 2009-2010 - Record of decision from the Federal Highway Administration; ongoing analysis and design
• 2010-2012 - Ongoing design and begin to address real estate and utility issues
• 2012-2016 - Reconstruct the interchange

Questions or comments? Please call our project hotline at 262-548-6421.

Election gaffes are starting


I have been blogging about the various election problems to be expected around the country. H
ere are some updates:

For the second time, city of Racine election officials have had to mail out hundreds of absentee ballots to city residents. A box of absentee ballots is missing.  No one knows where the ballots are.

In Madison
, about 20 absentee ballots were sent out without the school district’s $13 million referendum question.

I suspect we will be hearing about more and more glitches between now and Election Day.

Report examines spending trends on higher education

Taxes

 

A report by the non-partisan Wisconsin Taxpayers Alliance says, “growth in tax dollars going to the UW has trailed overall state spending, state school aid, and inflation.”

At first blush, the WISTAX finding may sound as though the UW is getting a raw deal. However, it is clear why growth in tax dollars for UW has fallen behind. Given the numbers, keeping pace with the growth in overall state spending and state school aid would be extremely difficult.

Ready for some eye-popping statistics? WISTAX reports, “Between 1983 and 2007, state aids and tax credits for K-12 schools rose 320%, while overall state expenditures were up 222%. By comparison, inflation—as measured by the consumer price index (CPI)— rose 115%, and UW funding, 99%.

Here is the WISTAX news release.

Teacher pay tied to test scores


Traditionally, American teachers have seen their salaries rise as years of service and the number of degrees they achieve increase. School districts in eight states are trying something new: offering higher pay and bonuses in exchange for improved student test scores or if teachers opt to work in schools difficult to staff.

Doe the experiment work? USA Today reports, “In dozens of districts, test scores already have earned teachers more money. Do such plans work? A proposed realignment of pay in Washington, D.C., public schools could prove the most sweeping of all. Teachers with as few as six years of experience could earn well over $100,000 — more than twice the national average.”

Michael Podgursky, Professor of Economics at the Harry S. Truman School of Public Affairs and Economics Department at the University of Missouri–Columbia says school districts should at least consider this concept.

“We can’t say, ‘Do this; or this is the right way to do it,’” he said. “However, the preponderance of evidence, when you look at a variety of sources, including the limited number of evaluations and the evidence we have on the variation of teacher effectiveness, suggests that it really is something school districts should be exploring or piloting. Every one of the evaluations has been virtually positive. They all suggest there’s a positive response in terms of outcome measures – including test scores.”

Podgursky and Matthew Springer, Research Assistant Professor of Public Policy and Education at Peabody College of Vanderbilt University and Director of the National Center on Performance Incentives authored a study on this issue during 2007 entitled, Teacher Performance Pay: A Review. Podgursky and Springer conclude, in part:

“In the long run, a pay scheme tends to attract employees who prefer or prosper under it. While the literature is not sufficiently robust to prescribe how systems should be designed, it is sufficiently positive to suggest that further experiments and pilot programs by districts and states are very much in order.  School administrators need to channel some of these funds toward more strategic pay experiments designed to raise student achievement. Education policy makers should nurture, expand, and evaluate these local experiments.”

You can read their study here. 

I agree. This is an intriguing idea that while in need of further study is worth consideration.

Unlike Wisconsin, what other states are doing Election Day

Photo ID


Take a look at this list of states:

Florida
Georgia
Hawaii
Indiana
Louisiana
Michigan
South Dakota
Alabama
Alaska
Arizona
Arkansas
Colorado
Connecticut
Delaware
Kentucky
Missouri
Montana
North Dakota
Ohio
South Carolina
Tennessee
Texas
Virginia
Washington

You will notice Wisconsin is not on the list. That is because the list includes states that either request or require identification to vote.

Presenting identification at the polls is not a barrier or hardship to vote. 
In fact, The National Conference of State Legislatures (NCSL) writes, “In no state is a voter who cannot produce identification turned away from the polls—all states have some sort of recourse for voters without identification to cast a vote.  However, in Georgia and Indiana, voters without ID vote a provisional ballot, and must return to election officials within a few days and show a photo ID in order for their ballots to be counted.”

Here is the NCSL rundown on what other states require for voting.

Keep in mind why Wisconsin does not have a photo ID law on the books. Governor Doyle and state Senate Democrats killed any chance of a photo ID requirement being in place for the critical November elections when the governor vetoed photo ID legislation three times and Senate Democrats refused to allow a vote on a photo ID constitutional amendment. A common sense photo ID requirement would not be an obstacle to voting or hamper the process.

How is your school district doing?


Wisconsin
isn’t cheap when it comes to funding education, especially our area of the state. The Public Policy Forum’s October 2008 Research Brief indicates school spending is above average in the southeast part of Wisconsin and higher than the state as a whole.

Our region is behind the rest of the state in graduation but surpasses the state in ACT and AP scores.

You can read more about these and other findings in The Public Policy Forum’s October 2008 Research Brief here.

Wisconsin counties struggling to grow income

Taxes


Wisconsin
incomes continue to lag behind the rest of the nation. The non-partisan Wisconsin Taxpayers Alliance (WISTAX) has broken down Wisconsin incomes by county, and found that most of the state’s 72 counties are experiencing problems with income growth.

The ten fastest growing counties were in Bayfield, Buffalo, Door, Florence, Green
Lake, Kewaunee, Langlade, Ozaukee, Vilas, and Waukesha. But WISTAX points out these counties are small, with less than 11 percent of the state’ population.

Overall, the news is disappointing. WISTAX reports:

“During the 2003-2006 period, state income growth lagged the nation. While national incomes climbed 5.2% per year, Badger State incomes rose 3.9% annually. From 2003 through 2007, only metro Milwaukee (Milwaukee, Ozaukee, Washington, and Waukesha counties) and Sheboygan had income growth topping the state average. However, both areas were in the bottom half of 365 U.S. metro areas studied.”

You can read the WISTAX news release here.

Wisconsin law gives workers time to vote

News you can use


Under Wisconsin law, employers must allow workers time to vote on Election Day. Here is the Wisconsin statute:

6.76 Time off for voting.
(1)
Any person entitled to vote at an election is entitled to be absent from work while the polls are open for a period not to exceed 3 successive hours to vote. The elector shall notify the affected employer before election day of the intended absence. The employer may designate the time of day for the absence.
(2) No penalty, other than a deduction for time lost, may be imposed upon an elector by his or her employer by reason of the absence authorized by this section.
(3) This section applies to all employers including the state and all political subdivisions of the state and their employees, but does not affect the employees’ right to holidays existing on June 28, 1945, or established after that date.
History: 1977 c. 394; 1991 a. 316.

 

Audits done about state health insurance program

Audits


Wisconsin’s highly-acclaimed Legislative Audit Bureau (LAB) has released two audits about the Wisconsin Health Insurance Risk-Sharing Plan (HIRSP) Authority. The HIRSP Authority offers medical and prescription drug insurance for those unable to obtain coverage in the private market or who have lost employer-sponsored group
health insurance.

Financial records of the HIRSP Authority for the final six months of 2006 and all of calendar year 2007 were reviewed. The LAB did not find what it called, “significant concerns,” but it does advise that the HIRSP Authority work with the federal government to settle a federal cash management issue.

Every quarter, the HIRSP Authority should remit to the federal government interest earned on advances of federal funds. The LAB found that a $4,422,935 grant was awarded to Wisconsin for HIRSP during September 2006 by the Centers for Medicare and Medicaid Services (CMS) in the U.S. Department of Health and Human Services under a grant program. The entire amount was drawn by the Wisconsin Department of Administration (DOA) during November 2006 and transferred through the Wisconsin Office of the Commissioner of Insurance (OCI) to the HIRSP Authority during the first week of January 2007.

The LAB reports the HIRSP Authority had spent only $2,333,710 of the federal grant
when it received the funds during January 2007. The remaining $2,089,225 was spent from January through June 2007. The HIRSP Authority did not remit to CMS any interest earned on the federal funds it received.

How could that happen? The LAB explains that there was a change in the administration of HIRSP effective July 1, 2006. Control was transferred from the Wisconsin Department of Health and Family Services to the HIRSP Authority effective July 1, 2006. Prior to that time, OCI received federal funds to be paid to the HIRSP Authority. State law was then changed to allow federal grant funds to go directly to the HIRSP Authority. As a result, the LAB reports, “the HIRSP Authority may owe interest to CMS on the advance of $2,089,225 it received in January 2007. Potential interest earnings on those funds are estimated to not exceed $33,000 for the period January through June 2007.”

The LAB writes that when the administration of HIRSP changed, staff members at the HIRSP Authority were unaware of and not informed about the cash management requirements. The audit recommends that the HIRSP Authority work with CMS, DOA, and OCI to resolve this issue and take measures to meet federal cash requirements in the future.

I commend the LAB for their consistently outstanding work. You can read their audits here and here.

Time running out to apply for popular absentee ballots

News you can use


There is still time to apply for an absentee ballot in Wisconsin. You must complete the proper form and mail it to or turn it into your municipal clerk's office. The application must be received by 5:00 this Thursday, the Thursday before the election in order for an absentee ballot to be mailed to you.

Here are instructions on how to apply for an absentee ballot in Wisconsin.

During May, I blogged about the trend of voting via the Post Office.  As one election official put it, “There is no line at your mailbox.”  Just how popular is the absentee ballot? The Associated Press reports that nationwide, about a third of the electorate is expected to vote before Election Day, November 4, 2008.

The numbers show an increasing percentage of voters want to take advantage of the absentee ballot because they are travelling, they are elderly and have difficulty getting to the polls, the convenience of considering their choices in the comfortable confines of their home, or simply because they can. Twenty-eight states, including Wisconsin, allow anyone to vote absentee, no questions asked.

During 2000, 16 percent of voters in the United States cast their ballots early. The number increased to 22 percent in 2004.

Statewide in Wisconsin, according to the Government Accountability Board’s Kyle Richmond who was quoted by the Associated Press, about 365,000 people used absentee ballots or cast early votes at clerk’s offices in 2004, about 12 percent of the voting age population in the state. The number is expected to grow this year to 15 percent.

At least 40% of California’s registered voters already have decided they want to vote by mail. The LA Times reports that according to the Early Voting Information Center at Reed College in Portland, Oregon, a majority of voters prefer their mailbox over the ballot box in Nevada, New Mexico, Arizona and Colorado. Oregon did away entirely with polling places during 2000. Washington state is getting close to 100% vote-by-mail.

Here is an Associated Press story on the popularity of Post Office voting.

This could be a very tough winter

I’m not talking about the frigid cold or heavy snow. I’m talking about rough travelling conditions due to a shortage of road salt.

The Appleton Post-Crescent reports, “Dave Vieth, director of the state's bureau of highway operations, said the state purchased an amount about 40,000 tons short of what it requested during an early-year buy. It plans to increase the use of additives to stretch supplies and truck salt from different parts of the state as necessary.”

Why the shortage? In a nutshell, demand is high, supplies are down, and costs are up. The Post- Crescent reports, “Road salt prices now range as high as $250 per ton in the upper Midwest, and some would-be buyers are finding it hard to come by at any price.” It could have been worse, but Wisconsin, unlike some other states, put in bids for road salt early.

One state official told road maintenance supervisors to use only enough salt to “keep the snow plowable,” as well as anti-icing and de-icing additives.

Heavy snowfall last winter resulted in the United States dumping a near-record 20.3 million tons of salt.

Here are more details from the Appleton Post-Crescent and USA Today.

No improvement in Wisconsin's woeful business climate

Business, Taxes


Wisconsin’s business tax climate continues to be one of the worst in the country. The nonpartisan Tax Foundation in Washington D.C. has released its 2009 State Business Tax Climate Index, ranking Wisconsin number 38 (Wisconsin was number 39 last year). The annual study is significant because it demonstrates how states compare to one another in competitiveness.

Here are the five specific areas the Tax Foundation reviewed in each state to come up with its Index and how Wisconsin scored on each: corporate taxes (29), individual income taxes (44), sales taxes (18), unemployment insurance taxes (25), and property taxes (31).

American companies confront a double-whammy. They pay one of the highest corporate tax rates of any of the industrialized nations. The top federal rate on corporate income is 35 percent. On top of that, some states institute harsh tax systems that make competition difficult. Companies will go where they have the best advantage. As the Tax Foundation correctly reports, “States with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth.”

While booming job creation overseas can’t be overlooked, the U.S. Department of Labor reports most significant job relocations are from one state to another. A state like Wisconsin must be more concerned about jobs moving to Indiana (Business tax climate number 14), Michigan (number 20) or Illinois (number 23) than India or China.

The ten states with the best business tax climates are, in order, Wyoming, South Dakota, Nevada, Alaska, Florida, Montana, Texas, New Hampshire, Oregon, and Delaware. Wyoming, Nevada and South Dakota do not have corporate or individual income taxes. Alaska does not have individual income or state-level sales taxes. Florida and Texas do not have individual income taxes. New Hampshire, Delaware, Oregon and Montana do not have sales taxes.  States that are able to draw adequate revenue without one of the major taxes will be more competitive than states that impose every possible tax.

Some factors contribute to Wisconsin’s poor ranking. The income level at which a state’s top rate kicks in determines what amount of income is subject to the top rate. Wisconsin scores badly here because it is one of the states that has arranged its multiple tax brackets so that the top rate takes effect in the middle range of income ($152,140).

Wisconsin has an Alternative Minimum Tax (AMT) that is modeled after the federal AMT. The Tax Foundation says the AMT is, “an inefficient way to prevent tax deductions and credits from totally eliminating tax liability,” that puts states like Wisconsin through, “needless tax complexity.”

Then there is our gas tax, the fourth highest in the country at 32.9 cents. Because gasoline constitutes a large expense, states with lower gas taxes are more competitive.

How can states like Wisconsin improve their business climates? What about tax incentives and subsidies? The Tax Foundation’s position and I concur, is that, “if a state needs to offer such packages, it is most likely covering for a woeful business tax climate. A far more effective approach is to systematically improve the business tax climate for the long term so as to improve the state's competitiveness.”

Surely, other factors play a role in a state’s business climate including how close it is to raw materials and transportation centers, the quality of schools, the skill of its workforce, and the state’s quality of life. Some of these areas lie beyond the scope of state lawmakers to directly control. However, legislators can make policy decisions that directly impact a sate’s tax system, and thus, the state’s business climate.

I agree with the Tax Foundation that writes:

“Taxes matter to business. Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system, and the long-term health of a state's economy. Most importantly, taxes diminish profits. If taxes take a larger portion of profits, that cost is passed along to either consumers (through higher prices), workers (through lower wages or fewer jobs), or shareholders (through lower dividends or share value). Thus a state with lower tax costs will be more attractive to business investment, and more likely to experience economic growth.”

The best tax system is one that is simple and fair to all businesses that shuns excessive business taxes and keeps costs for adhering to the system down. Until Wisconsin adopts policies to enable a business climate that encourages growth, it will continue to have problems competing.

You can find the 2009 State Business Tax Climate Index here.

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