Wisconsin Continues Push for Income Tax Reciprocity

Reinstating the income tax reciprocity agreement continues to be a top issue on the minds of those that live in Wisconsin and work across the river. While there is a border between our two states, those that live in our area know that we operate as a region with economic and social ties to our Minnesota neighbors.

 

While most taxpayers affected by the agreement know the history of this issue, some background may be useful in outlining the current status of negotiations. In 2009, then Minnesota Governor Tim Pawlenty ended the long-standing income tax reciprocity agreement between Wisconsin and Minnesota. In Governor Pawlenty’s letter to Wisconsin officials he cited a delay in the timing of payments between the states as the reason for ending the agreement. Minnesota also supported conducting a new benchmark study to more accurately account for those that cross the border to work.

 

The current leadership of the Wisconsin Department of Revenue (DOR) has put in a great deal of effort to try and restore reciprocity. To that end, Wisconsin DOR has made multiple offers to Minnesota that have addressed all the reasons listed in Governor Pawlenty’s letter to Wisconsin when the agreement was ended, including accelerated payments and completing a new benchmark study. Additionally, as stated by the non-partisan Wisconsin Legislative Fiscal Bureau, Wisconsin has offered to “split the difference” between the level of reciprocity payments each state believes is accurate. Wisconsin’s latest offer to Minnesota, made last summer, has gone unanswered to date.

 

Disappointingly, the Minnesota Department of Revenue is continuing to demand a new provision that has never before been a part of the reciprocity agreement and is not included in any reciprocity agreements Minnesota has with other states. This provision would require Wisconsin to pay Minnesota an additional payment of about $6 million per year, based on Minnesota’s estimates. It is important to note that this payment would be in addition to the approximately $87 million Wisconsin would pay Minnesota based on the difference in income tax withholdings. It is frustrating that Minnesota has made this unprecedented demand for additional money that has killed any reciprocity agreement when proposed by any state. Their demands are preventing a new agreement from being put in place and resulting in tens of thousands of taxpayers in both states continuing to experience higher costs and inconvenience in filing their tax returns.

 

Along with other Wisconsin legislators along the border, I have continued to reach out to Minnesota state legislators to see what could be done to get things moving on reestablishing the reciprocity agreement. While it is the responsibility of the governors of our two states to reach an agreement, I will continue to work with interested parties on both sides of the river to see what opportunities are available to encourage a new agreement.

Harsdorf Statement on Governor’s Budget Address

“The Governor’s budget proposal provides us with a starting point that maintains our focus on tax relief, reforming government, and encouraging job growth. I am pleased to hear of additional investments for property tax relief and addressing the skills gap, which continue to be top priorities of residents and employers in northwest Wisconsin.”

“While there are several challenging areas of the budget that will receive significant scrutiny, including the University of Wisconsin System and transportation funding, I am encouraged by a number of the initiatives and reforms included in the budget proposal. I look forward to listening to citizen input and working with my legislative colleagues as we consider modifications.”

Harsdorf to Hold Listening Sessions

(State Capitol, Madison)… State Senator Sheila Harsdorf (R-River Falls) has announced her latest listening session schedule for residents of the 10th Senate District. Listening sessions are intended to provide citizens throughout the district with the opportunity to talk with Harsdorf about issues of interest to them, to ask questions and to share their ideas and concerns.

 

“As we begin our work in the new legislative session, the input I receive in the listening sessions is invaluable in identifying the priorities of area residents. I appreciate the input and personal interaction with citizens that attend and share their thoughts,” said Harsdorf. “Given that many of my bill ideas come directly from suggestions raised by constituents, the feedback on how state government can be improved or reformed is critical in shaping my legislative agenda.”

 

Listening sessions have been scheduled around the 10th Senate District, which is comprised of parts of Burnett, Dunn, Pierce, Polk, and St. Croix Counties. Below are the dates, locations and times of the listening sessions:

 

Thursday, January 29

3:00 PM-4:00 PM, Menomonie, Dunn County Justice Center, Room 1402 (615 Stokke Parkway)

 

5:00 PM-6:00 PM, New Richmond City Hall, Lower Conference Room #1 (156 East First Street)

 

Friday, January 30

 

12:00 PM-1:00 PM, Grantsburg Village Hall, Board Room (316 South Brad Street)

 

2:00 PM-3:00 PM, Osceola Village Hall, Board Room (310 Chieftain Street)

 

Monday, February 2

 

4:00 PM-5:00 PM, Hudson, Town of Hudson Hall (980 County Road A)

 

If you would like more information please feel free to call Sen. Harsdorf’s office at 608-266-7745 or 1-800-862-1092 or e-mail Sen.Harsdorf@legis.wi.gov.

 

Tax Relief Remains Priority

As we look forward to the 2015-16 legislative session, continuing to reduce the tax burden on Wisconsin residents remains a top priority. In the last legislative session, we were successful in making significant progress in again reducing property taxes for homeowners and small businesses. As I travel the district and hear from area residents, property taxes continue to be the most frustrating and burdensome issue for seniors, working families, and small businesses.

Due to the State Legislature’s efforts to invest in property tax relief last session, Wisconsin property owners received a welcome reduction in their recent property tax bills. While the experiences of individual property taxpayers may vary due to changes in property assessments or local factors, such as approved referendums, the owner of a median-valued home in Wisconsin is expected to see a $100 drop in their 2014 tax bill.

This property tax reduction is the result of over $400 million in surplus revenue that the State Legislature and Governor committed to buying down the technical college levy as part of last spring’s tax relief measure. I have long supported efforts to reduce the impact of technical colleges on our property tax bills, including authoring legislation in prior sessions that would shift greater responsibility for technical college funding to the state. Given my position on this issue, I was pleased to work with my colleagues to enact this property tax relief.

In our area, it is estimated that a typical homeowner in the Wisconsin Indianhead Technical College District will see $124 in savings, while a typical homeowner in the Chippewa Valley Technical College District will see $115 in savings. Over $45 million in state revenues were committed to reducing the property taxes levied by these two technical college districts alone.

This property tax relief built upon our previous work to hold the line on property taxes, which has resulted in a lower property tax bill in 2014 than in 2010 for the owner of a median-valued home in our state. By comparison, under the prior administration, property taxes rose $230 on the same median-valued home between 2006 and 2010. If the trend of property tax increases seen during the 2006-2010 timeframe was maintained, property taxes on a typical homeowner would be nearly $400 higher than they are today.

I look forward to continuing to work with my colleagues to hold the line on property taxes and find ways to bring further relief to taxpayers. Please stay in touch by visiting my website at www.harsdorfsenate.com or calling my office at 1-800-862-1092 or 608-266-7745.

Top Ten Wisconsin Stories of 2014

An eventful 2014 has drawn to a close and the end of the year provides us with a good time to reflect on the year that has passed. Here are the top ten headlines and events of 2014 in Wisconsin in my view.

Growing Economy – Wisconsin’s unemployment rate has dropped to 5.2%, the lowest since October 2008. 51,000 private sector jobs were created in Wisconsin between November 2013 and November 2014.

Tax Relief – Surplus revenues were returned to hard-working taxpayers, including $400 million in property tax cuts to reduce the technical college portion on property tax bills.

St. Croix River Crossing – 2014 saw significant progress on the St. Croix River Crossing, including the construction of piers rising from the river. The new bridge is scheduled to open in fall 2016.

Encouraging Job Creation – The State Legislature continued its focus on boosting jobs and the economy through additional investments in worker training and reducing unnecessary red tape for employers.

Addressing Heroin Addiction – The H.O.P.E. package and other bills were passed to begin addressing the heroin epidemic in Wisconsin. Given the impact of this addiction on young people and families in our western Wisconsin communities I was pleased to be the Senate author of H.O.P.E.

GAAP Deficit Reduced – The state’s Comprehensive Annual Financial Report was recently released, showing a reduction in the state’s GAAP deficit of $1.6 billion over the past three years. The improvement in this stringent accounting method demonstrates the improving fiscal health of our state.

November Election – Voters in the fall re-elected Governor Walker and returned Republican majorities to both the State Senate and State Assembly.

Transportation Fund Protected – Voters also approved by a 4-1 margin a state constitutional amendment to protect the transportation fund from future raids for other spending purposes.

Wisconsin’s Positive Outlook – Moody’s improved Wisconsin’s bond rating outlook to positive in recognition of the state’s honest budgeting, improved rainy day fund, and stable retirement system.

Oral Chemotherapy Parity – Legislation was enacted to help ensure cancer patients have access to the treatment that is most effective in fighting their cancer, whether it is intravenous or oral chemotherapy.

It is an honor serving as your State Senator and I look forward to continuing to work to move Wisconsin forward in 2015. I wish you and your family a healthy and happy New Year! Please stay in touch by visiting my website at www.harsdorfsenate.com or calling my office at 1-800-862-1092 or 608-266-7745.

Wisconsin Voters to Decide Future Use of Transportation Fund

With a number of hard-fought campaigns being contested this election season, voters may not have heard much about the proposed amendment to the state Constitution that will be decided on November 4th. Under Wisconsin’s Constitution, proposed constitutional amendments must be passed by both the State Assembly and State Senate in two consecutive legislative sessions and then approved by voters in a statewide referendum. The proposed constitutional amendment that voters will decide though the statewide ballot question this fall is whether revenues deposited into the transportation fund should be available for other spending purposes by state government.

Currently, tax and fee revenues that are collected for transportation purposes, such as the gas tax and vehicle registration fees, are deposited into the transportation fund to fund our state’s transportation needs. As a result of past decisions to use tax revenue from the transportation fund for spending on other state programs, the state’s transportation fund was financially compromised. While the current administration and State Legislature have sought to reverse this trend by using surplus funds to restore these past transfers from the transportation fund, it is projected that the state’s transportation needs will outpace transportation fund revenues by $650 million in the next two years.

Following the transfers of money from the transportation fund, I and many of my legislative colleagues sought to find way to prevent similar raids in the future. By placing limits on the use of transportation fund revenues in the state Constitution, these funds would be protected from being used for purposes other than which they were collected for from taxpayers. I was a co-sponsor of the resolutions proposing this constitutional protection, which were approved by wide, bipartisan votes in both the State Senate and State Assembly.

The specific question that will be brought before voters on November 4th will be: Shall section of 9 (2) of article IV and section 11 of article VIII of the constitution be created to require that revenues generated by use of the state transportation system be deposited into a transportation fund administered by a department of transportation for the exclusive purpose of funding Wisconsin’s transportation systems and to prohibit any transfers or lapses from this fund?

A “yes” vote in favor of this question will limit the use of the transportation fund for transportation purposes only. A “no” vote against this question would allow future governors and legislators to use transportation fund revenues for other spending priorities.

I hope this information is useful as you make your decision for this fall’s election. Please feel free to contact me on this or any other issue by calling my office at 1-800-862-1092 or 608-266-7745 or sending me an e-mail at Sen.Harsdorf@legis.wi.gov.

State Legislature Continues Focus on Tax Relief

While the State Legislature concluded its legislative session this spring, work continues in the State Capitol as hearings are being held on a number of complex issues that may be considered next session. I am pleased to have been appointed to two committees that are considering further reforms to Wisconsin’s tax structure as we keep the focus on reducing our state’s tax burden and improving our state’s business climate.

Last week marked the first meeting of the Legislative Council Study Committee on the Review of Wisconsin Technical College System Funding and Governance. Given the reliance of technical colleges on the property tax and the interest in reducing the property tax burden, technical colleges have received a significant amount of attention from citizens and legislators. This Study Committee seeks to look further into the issues that have been raised in regards to the role of local and state technical college boards and the funding of technical colleges.

The Study Committee is charged with looking at the technical college system to determine if changes to the governing structure are appropriate, as well as considering changes to the mix of property taxes and state funding. As the vice chair of this Study Committee, I am pleased that we have area residents involved in technical fields participating as members of the Study Committee.

Given the concerns I have heard from taxpayers in our region, I have long supported reforms to the technical college property tax levy. To this end, I authored legislation in a past legislative session proposing to increase state aid while reducing the technical college property tax levy. This past session we made progress in this effort by passing legislation to reduce the technical college property tax levy by increasing state funding for technical colleges. The tax relief package we passed this spring used over $400 million of the state’s budget surplus for property tax relief by reducing the property tax levy for technical colleges.

I am also one of a number of legislators who are part of the Legislative Council Steering Committee for Personal Property Tax. The personal property tax is an issue I hear frequently as I visit our Main Streets and talk to small business owners. Many small business owners express their frustration with paying onerous taxes on equipment such as ovens, cameras, or compressors year after year, after having paid sales taxes on the same piece of equipment when it was purchased. This tax is burdensome for small business owners to track, imposes double-taxation of equipment, and is a hassle for local property tax assessors to administer. The committee will be fact finding and considering reforms that may be advanced.

Which state tax do you believe is in most need of reform? Please feel free to share your thoughts with me by visiting my website at www.harsdorfsenate.com or calling my office at 1-800-862-1092 or 608-266-7745.

Tax Reform Roundtable Comes to Western Wisconsin

Last week Lieutenant Governor Rebecca Kleefisch and Wisconsin Department of Revenue Secretary Rick Chandler visited northwest Wisconsin to discuss state tax policy and its impact on our household budgets and economy. The visit by the Lieutenant Governor and Secretary Chandler was part of a series of twenty roundtables on tax reform that they have held around the state to gather suggestions and comments from taxpayers.

I was pleased that our region was included in this tour as a roundtable was held last Thursday in Hudson at the University of Wisconsin-River Falls’ Hudson Center. Area residents, small business owners, local elected officials, and economic development professionals took part in this event to share and discuss their experiences with taxes in Wisconsin.

In addition to suggestions on improving our tax climate, a number of attendees at the roundtable raised the importance of controlling spending at all levels of government. Some of the key themes of the roundtable included:
• Addressing property taxes to help seniors, working families, and small businesses,
• Continue the Legislature’s efforts to reform assistance programs to encourage those seeking to re-enter the workforce,
• Reform onerous taxes that are affecting small businesses due to the economic downturn, and
• Repealing the personal property tax that hits Main Street businesses particularly hard and is difficult for local governments to administer.

As discussed by Secretary Chandler in his presentation at the roundtable, the State Legislature and Governor passed three significant tax relief measures this session, totaling over $500 million in property tax relief and nearly $750 million in income tax cuts. Overall reductions to the tax burden since 2011 amount to over $1.9 billion in taxpayer savings. While these are positive developments for Wisconsin taxpayers, there is more work to be done to address the state’s tax burden. I look forward to working with my colleagues next session to continue our progress on keeping more of your hard-earned dollars in your pockets.

Those that were unable to attend the roundtable but would like to submit comments or suggestions to the Lieutenant Governor and Secretary Chandler can do so online at www.taxreform.wi.gov/. This website also includes information on the tax reform roundtables and Secretary Chandler’s presentation on Wisconsin’s tax structure.

What are your suggestions for reforming Wisconsin’s tax system? Please feel free to share your thoughts with me by visiting my website at www.harsdorfsenate.com or calling my office at 1-800-862-1092 or 608-266-7745.

Summer Celebrations Ramping Up with June Dairy Month

Following one of the longest and coldest winters in decades, I know many are enjoying the recent pleasant weather and are looking forward to a wonderful Wisconsin summer. Community festivals have already begun in many areas this month and our summer celebrations will be in full swing starting with June Dairy Month.

Agriculture is an important component of our state’s economy, as it generates nearly $60 billion in economic activity annually and employs 10% of our state’s workforce – over 350,000 Wisconsin workers. Wisconsin has a proud history of being a national leader in dairy production and continues to be the top cheese producing state and ranks second in milk production. Additionally, Wisconsin’s exports of dairy-related products grew by 41% in 2013, amounting to nearly $400 million in trade.

We recognize our strong dairy farming industry each year during June Dairy Month. This provides us the opportunity to showcase our dairy industry and celebrate our agricultural heritage. I encourage you to join me in participating in June Dairy Month activities by visiting www.dairydaysofsummer.com to find events near you.

In addition to June’s Dairy Month events, Wisconsin’s Free Outdoor Fun Weekend will be held next month on June 7th and 8th. This annual event encourages residents to check out Wisconsin’s beautiful natural resources by waiving all state trail pass fees, state park admissions, and fishing license requirements. Many state parks will also make equipment available for use at no charge. More information on the Free Outdoor Fun Weekend can be found on the Department of Natural Resources’ website at www.dnr.wi.gov.

Another great resource for those seeking weekend outings or thinking about summer vacations is the Department of Tourism’s Travel Wisconsin website at www.travelwisconsin.com. Community festivals, art shows, farmer’s markets, and county fairs are just a few of the events highlighted through Travel Wisconsin. Those interested in more information can also frequently find details on community events through websites maintained by our area chambers of commerce and tourism bureaus.

Do you have suggestions on improving tourism promotion efforts in Wisconsin? Please feel free to share your thoughts with me by visiting my website at www.harsdorfsenate.com or calling my office at 1-800-862-1092 or 608-266-7745.

Top Ten Accomplishments of the 2013-14 Session

With the recent conclusion of the two-year legislative session, we are provided a good opportunity to look back on the top legislative accomplishments of 2013-14. Here is my list of the top ten bills or actions taken by the State Legislature this session.

Tax Relief – The State Legislature passed three significant tax relief measures this session, totaling over $500 million in property tax relief and nearly $750 million in income tax cuts. Overall reductions to the tax burden since 2011 amount to over $1.9 billion in taxpayer savings.

Encouraging Job Creation – With our continued focus on encouraging job growth and improving our business climate, legislation was enacted to address the skills gap through workforce development initiatives, improving access to investment capital, and reducing unnecessary red tape.

Budget Surplus – Through economic growth, financially responsible budgeting, and working to live within the means of taxpayers, our state benefitted from an over $1 billion budget surplus. This growth in state revenues allowed the Legislature to invest in our priorities and enact tax relief.

Addressing Heroin Addiction – I was pleased to be the Senate author of the H.O.P.E. package that begins to address the heroin epidemic affecting our state. Two other bills that I co-sponsored will expand addiction treatment options in underserved areas and increase funding for local treatment and diversion programs.

Rainy Day Fund – Deposits have been made to the state’s rainy day fund for three consecutive years for the first time ever and the fund now has a balance of $280 million.

Enhanced DNA Collection – Recognizing the value that advances in DNA technology have on saving lives, apprehending career criminals, and saving taxpayer dollars, enhanced DNA collection was approved by the State Legislature and signed into law. I have championed this effort to collect DNA profiles from those arrested on felony charges to stop career criminals and provide relief to victims and their families.

Investing in Students – Prudent investments in education were made to support students and their families, as well as in funding private-public partnerships through technical colleges to address local workforce needs.

Improving Mental Health Services – Representative Erik Severson chaired a bipartisan task force that developed over a dozen bills that were enacted to reform and modernize our state’s mental health laws and to improve treatment and accessibility of services.

Tuition Freeze – University of Wisconsin tuition was frozen to help students and their families.

Reducing Barriers to Work – A number of bills were advanced to help individuals gain professional credentials and begin employment. Students attending a technical college or university may begin taking licensing exams before graduation as a means to enter the workforce more quickly. Legislation I introduced to further this effort involved eliminating unreasonable barriers for nurses trained in other states to be licensed in Wisconsin. This proposal was developed given input I received from an area nurse.

What do you believe is the top legislative accomplishment of the past session? You can let me know by visiting my website at www.harsdorfsenate.com or calling my office at 1-800-862-1092 or 608-266-7745.