On February 28, 2019, Governor Tony Evers released his 2019-2021 biennium budget. The budget includes a wide range or policy changes and reversal of several measures that impact commercial real estate and job creation. The $83 billion budget raises taxes overall by $550 million over the next two years and includes many items touted during Governor Evers’ campaign. We have had the opportunity to meet with Governor Evers to reiterate our commitment to serving as a resource to him, his cabinet, and those in the legislature looking to advance a bipartisan budget. We focus on not only issues pertaining to economic development and commercial real estate, but job creation, education and infrastructure. Our WRA State lobby team policy committee are thoughtfully reviewing all the items proposed in the budget and have been in contact with others on how we continue advancing our industry, support communities and move responsible policy. The budget process will take time, so continue to watch for updates or join our policy committee to engage further. Below are several items that we will be monitoring and/or engaging on, in the State budget. Please reach out to the association office for more information, concerns, and to be included on our monthly policy calls and meetings.
Jobs and Attraction:
• Repeal of Right To Work legislation. Under that law, if someone works in a unionized workplace, they’re not required to join that union or pay dues.
• Restoration of prevailing wage on state and local public-works projects which generally requires employers to pay workers the hourly wage and fringe benefits paid to the majority of workers in a particular county
• Increases the minimum wage to $8.25 in 2020, $9.00 in 2021, and annual increases to the CPI thereafter
• Defunds the $7 million talent attraction campaign focused on drawing workers from surrounding states, and marketing Wisconsin to military veterans at bases throughout the country
Tax:
• Specify that the $3.5 million limit for awards under the historic rehabilitation credit program be applied on a per project basis as opposed to a per parcel basis. The Governor also recommends repealing the state’s supplement to the former federal credit for nonhistoric qualified rehabilitated buildings as a result of the credit’s repeal at the federal level*
• Changes to tax assessment process for vacant buildings – the budget includes both “Dark Store” bills that were introduced in the previous legislative session
• TIF – limiting the percentage of tax incremental district project costs that may be allocated for developer grants to 20 percent of total project costs to focus tax incremental finance policy on public infrastructure development. It is also recommended that project plans include sensitivity analyses for alternative projections of a district’s finances under different economic situations, including a slower pace of development and a lower rate of property value growth than expected in the district*
• Restore General Purpose Revenue to increase school funding requirements including changes to levy limits that would alter funding for shared emergency services and transit (which would be expanded)
• Scales back the Manufacturing portion of the Manufacturing and Agricultural tax credit for manufacturers that earn more than $300,000, increasing taxes on manufacturers by approximately $516 million over the biennium
• Eliminates the requirement that online sales taxes collected from out of state buyers must be used to reduce Wisconsin income taxes
• Loosens property tax caps and institutes an annual automatic 2% property tax increase that we estimate to raises taxes on homeowners and businesses by $220 million per year
Technical Changes:
• Overhaul to DSPS (Department of Service and Professional Standards) to modernize and streamline technology within the department. The real estate licensing process is handled through the DSPS
Transportation / Infrastructure:
• A large portion of Governor Evers’ budget focuses on a $520 million increase in transportation funding. This would be done through an increase in the gas tax from 32 cents to 40.9 cents per gallon and allow for the gas tax to be adjusted based on inflation
• Increase registration fees for drivers including heavy trucks
• Reprioritize freeway projects including the expansion from Ozaukee county to Milwaukee on I-43 and the Zoo Interchange
• Repeal of the minimum markup law which prohibits the sale of gas below what it costs a retailer to purchase, resulting in a roughly 9 percent markup at the pump. Retailers have long opposed repeal because they say the law keeps prices competitive