Budget Bill Prioritizes Western Wisconsin Projects

While much of the attention during the budget process focuses on the largest portions of the state budget, such as K-12 education, medical assistance, and transportation, the budget bill includes a number of provisions that seek to address specific state priorities around the state. I am pleased that I was able to work with legislative colleagues in our region to advance critical projects in western Wisconsin.

One of the most significant projects in western Wisconsin is the construction of the new bridge crossing over the St. Croix River. As those of us that live in our area know, replacing the Stillwater Bridge is critical to meeting our infrastructure needs, addressing emergency services and safety concerns, and reducing congestion. The Stillwater Bridge, which has been in use for over 80 years, is consistently rated poorly during bridge inspections and is frequently closed for repairs, diverting traffic through other communities.

It has been exciting to watch the new St. Croix Crossing rise from the river, revealing the vision of the designers of a bridge that will meet the needs of the region as well as complement the river’s beauty. As approach work on both sides of the river advances and precast bridge decking is now being installed, this vital link is rapidly becoming a reality after decades of legal battles. I was pleased that the budget bill includes the final $20 million commitment for Wisconsin’s costs of construction, which will address the final paving of the Wisconsin approach and creation of the pedestrian and bicycle loop trail that will be constructed along the new St. Croix Crossing and old Stillwater Bridge.

The state budget also includes funding for the Department of Natural Resources (DNR) to repair or replace the Little Falls Dam in Willow River State Park. Given its scenic beauty and convenient location for residents of western Wisconsin and the Twin Cities, Willow River State Park is one of our region’s many natural assets that generates tourism activity and supports local jobs. Additionally, Willow River is one of the top performing state parks in Wisconsin, generating nearly twice as much in revenue as is spent on the park’s operations.

One of the top attractions at the park is Little Falls Lake, which is created by the Little Falls Dam. Unfortunately, inspections of the dam in recent years have indicated that significant repairs are necessary, including the potential for removal and replacement of the dam. Working with Representative Dean Knudson, we were able to provide $5 million for the DNR to repair or replace the dam, along with over $3 million in funds previously approved by the State Building Commission for the project.

Another provision included in the budget provides a $250,000 matching grant for the St. Croix Valley Business Incubator. This project is a collaboration that includes UW-River Falls, City of River Falls, and River Falls Economic Development Corporation that seeks to create jobs and foster an entrepreneurial culture by leveraging the commercialization of University research and capitalizing on business partnership opportunities. Recognizing the value of small businesses to growing jobs and economic development, business incubators are a powerful tool to provide support to entrepreneurs as they seek to launch their ideas into successful business ventures.

I look forward to continuing to advocate for western Wisconsin in the State Senate and appreciate your suggestions on local initiatives. Please feel free to contact me by calling my office at 1-800-862-1092 or 608-266-7745 or by sending me an e-mail at Sen.Harsdorf@legis.wi.gov.

Taxpayers Score with New Bucks Deal

One of the proposals that received significant attention in the Governor’s budget was a $220 million plan to help construct a new arena for the Milwaukee Bucks. This initiative has garnered much discussion and debate, as legislators have sought a better deal for the state by bringing all the stakeholders to the table to negotiate.

While the initial level of bonding was not something that I could support, I also felt strongly that the proposal should be removed from the state budget bill and considered separately by the State Legislature. Given the complexity of reaching agreement on a plan that included private financial support, city and county governments, and the state, I was pleased when this plan was pulled from the budget and introduced as a separate bill.

As with most debates relating to sports venues, this issue arises from the interest in replacing the aging Bradley Center, which is one of the oldest facilities currently in use by a National Basketball Association (NBA) team. When former U.S. Senator Herb Kohl sold the Bucks to their current owners, the NBA required a provision in the contract that set a deadline for a new arena. If that deadline is not met, the NBA would repurchase the team from the current owners and would look at moving the franchise to another city, such as Seattle or Las Vegas.

In response to the NBA’s condition included in the Bucks’ sale, Senator Kohl committed $100 million and the current owners committed $150 million towards the cost of a new arena, covering $250 million of the estimated arena cost of $500 million. While the Governor’s initial proposal sought to address the state’s portion with borrowing, there have been significant negotiations and revisions resulting in a much improved plan for building a new arena, including significant contributions from Milwaukee County and the City of Milwaukee, as well as a $2 surcharge on tickets for events at the new arena. The updated plan calls for a $4 million annual contribution from the state over the next twenty years for a total of $80 million, which will be partially offset by $500,000 the state will receive annually from its portion of the ticket surcharge.

Given the fact that professional athletes pay income taxes based on where they play, rather than where they live, and that the state collected $6.5 million in players’ income tax revenue in 2013, if the Bucks were to move the state would experience a $6.5 million loss in tax revenue. The potential loss of that income tax revenue would exceed the state’s commitment of $4 million towards a new arena. Additionally, the amount of income tax revenue the state collects due to the Bucks is expected to increase in upcoming years, as new television contracts are reached and players’ salaries go up. The $6.5 million figure does not include the economic impact of the team on other businesses or the revenue generated through sales or other taxes.

In addition to the state’s financial interest in ensuring the Bucks remain in our state, those of us in western Wisconsin recognize the value of a vibrant metropolitan area to a state’s economy, as seen in the impact of the Twin Cities on Minnesota. The new arena is envisioned to be part of a larger entertainment district, which is expected to spur additional investment in an underutilized area of Milwaukee and hundreds of millions are anticipated to be invested in new commercial and residential development. Due to the compelling combination of protecting state taxpayers from a loss of revenue and the potential for revitalizing part of Wisconsin’s largest city, I supported the new arena plan as it was passed by the State Senate on a bipartisan vote of 21-10. The bill is now pending before the State Assembly.

Please feel free to contact me to share your views on the Bucks arena plan by calling my office at 1-800-862-1092 or 608-266-7745 or by sending me an e-mail at Sen.Harsdorf@legis.wi.gov.

Legislature Improves Budget and Protects Taxpayers

The state budget process came to an end last week as the State Legislature passed the amended budget bill, which was signed into law by the Governor over the weekend. Beginning with the introduction of the Governor’s budget bill earlier this year, the budget debate has proven challenging as we worked to invest in our state’s priorities while living within the means of taxpayers. Throughout the process, public input helped bring attention to a number of provisions in need of review and the final package approved by legislators was improved as a result.

I appreciate the input provided by area residents on the budget, expressing support or concerns with various provisions proposed in the budget. Thanks to the testimony at the public hearings and many comments from citizens on the budget bill, significant revisions were made, including removing changes to the Family Care and IRIS long-term care programs, maintaining Aging and Disability Resource Centers (ADRCs), restoring funding for the Knowles-Nelson Stewardship Program, and preserving the SeniorCare prescription drug program. The State Legislature also prioritized available resources for education by providing nearly $200 million in additional funding above the Governor’s proposal.

In addition to restoring funding for the Stewardship Program, the budget makes a number of important changes affecting conservation. I worked to restore funding for conservation programs and positions that are helping to improve water quality and preserve our resources in western Wisconsin and throughout the state. These positions include local county conservation and UW Extension staff that work with agricultural producers and landowners to implement best practices in conservation. A proposal to provide resources for farmer-led water quality initiatives was approved. The revised budget also preserves a role for citizens in developing agriculture and natural resources policies through the DATCP and Natural Resources Boards.

As property tax relief continues to be an important issue for homeowners, working families, and seniors, I am pleased that the budget passed by the State Legislature continues our efforts to reduce the property tax burden. While the effect on individual taxpayers will depend on local factors, such as the approval of referendums or changes in property values, the property taxes on a median-valued home in Wisconsin will again go down over the next two years according to the non-partisan Legislative Fiscal Bureau. This reduction builds upon our work to enact $500 million in property tax relief in the last legislative session, which included buying down the technical college levy by $400 million that resulted in about a 50% reduction in this line item on property tax bills.

The State Legislature also worked to reduce costs and improve taxpayer value through a number of budget initiatives. UW System students and their families will have certainty in their college costs as tuition will be frozen for an additional two years. A tax reform measure reduces the marriage penalty in the state income tax code. The budget bill will continue promoting lean initiatives and finding efficiencies in state government, while mandates on local governments that resulted in higher construction costs were repealed.

While there are inevitably provisions that I have concerns with in the state budget, I believe the budget bill passed by the Legislature represents significant improvement and reflects the feedback provided by citizens. I encourage your continued input by calling my office at 1-800-862-1092 or 608-266-7745 or by sending me an e-mail at Sen.Harsdorf@legis.wi.gov.

Transportation Fund Facing Critical Crossroads

As the State Legislature’s budget writing committee, the Joint Committee on Finance, approaches the end of its work in modifying the Governor’s budget proposal, the transportation fund is one of the few remaining issues pending before the Committee. There continues to be significant debate and discussion among transportation stakeholders, local elected officials, and legislators regarding how best to proceed with the state’s transportation budget.

The transportation fund is at a critical juncture as revenues to the fund are not sufficient to meet the demands on our transportation system. The cost of road construction and maintenance have increased in response to a number of factors, including the price of road materials such as asphalt and steel. While there are growing expenditure pressures on the transportation fund, revenues have not increased to meet our state’s infrastructure needs.

The primary sources of funding for the state’s transportation fund are vehicle registration fees and the gas tax, which account for around 90% of transportation fund revenues. Due to the improved fuel efficiency of motor vehicles, the number of gallons of gas sold has decreased by an average of 0.2% annually in Wisconsin over the last ten years. As a result, revenues from gas taxes have remained relatively flat since 2006. Additionally, the number of automobiles and light trucks registered with the state has increased by less than 1% annually over the same ten year time period.

As a result of this squeeze on the transportation budget, the State Legislature is now debating the best approach to addressing our long-term transportation needs. The Governor’s budget proposal, which relies heavily on bonding to pay for transportation projects, has drawn significant scrutiny and will not be approved in its current form. If the level of bonding proposed was to be approved, it is estimated that 22 cents of every dollar in the transportation fund would be committed to debt service by the 2016-17 fiscal year. By comparison, ten years ago less than ten cents of every dollar in the fund was committed to debt service.

I, along with many of my colleagues, believe that a sustainable solution to the transportation fund must be found and the level of bonding must be lowered. Even as legislators largely agree over the amount of bonding that should be removed from the budget, discussions are ongoing over how those reductions should be implemented. While reducing bonding will delay transportation projects and present difficult choices, it is critical that we pass a fiscally responsible transportation budget that does not burden future generations with an unsustainable level of borrowing.

What are your ideas for funding infrastructure in Wisconsin? Which options do you prefer in addressing the transportation fund challenges? Please feel free to share your thoughts by calling my office at 1-800-862-1092 or 608-266-7745 or by sending me an e-mail at Sen.Harsdorf@legis.wi.gov.

Harsdorf Votes to Save SeniorCare and Fund Schools

The State Legislature’s budget writing committee, the Joint Committee on Finance, continued its work this week in making modifications to the Governor’s budget proposal. Following several public hearings around the state on the budget in March, the Committee began voting on changes to the budget bill in April and is anticipated to finish its work on the budget in the coming days.

This week the Committee took up two significant portions of the budget, education funding and SeniorCare. The Committee received a significant amount of input at the public hearings on these two issues. In addition to the testimony provided at the public hearings, I have heard from many area residents who also expressed concern over these and other provisions in the Governor’s budget bill. As a member of the Committee, I am pleased that we were able to make positive changes and address concerns raised by the public.

SeniorCare is a valued program for many seniors in western Wisconsin and across the state and provides access to affordable prescription medications. This program, which was created prior to the federal Medicare Part D program, is a cost-effective and simpler alternative that saves dollars for both seniors and taxpayers. In action taken this week, the Committee voted to remove changes to SeniorCare that were proposed by the Governor that would have required seniors to apply for Medicare Part D in order to maintain enrollment in SeniorCare. I voted to eliminate this proposed requirement and to continue to fully fund SeniorCare.

The Committee also took up the K-12 education portion of the budget bill this week. Given the concerns with the impact that the Governor’s budget proposal would have on our local schools I am pleased that we were able to eliminate the proposed reduction in aid in the first year of the budget and to provide an increase of $100 per pupil in the second year of the biennium. Despite the limited revenue available, we reaffirmed our commitment to schools by providing nearly $200 million in additional funding above the current budget proposal.

In addition to providing funding for per pupil aid, the Committee approved increases in assistance for rural school districts through increases in sparsity aid and high cost transportation aid. Also, a new program was established to provide schools with $5 million in high cost special education aid.

Please feel free to share your thoughts on the budget bill by calling my office at 1-800-862-1092 or 608-266-7745 or by sending me an e-mail at Sen.Harsdorf@legis.wi.gov.

UW and Business are Powerful Partners for Growth

The Governor’s budget proposal for the University of Wisconsin System has sparked a debate on the role and mission of this world-class institution to our state. As policy makers discuss the implications of the current two-year budget on the UW System, the decisions made in the coming months will have a lasting effect on our universities and colleges for years to come. It is important that the discussion focus on how we can ensure that the UW System is nimble and responsive to an ever changing world as we work to maintain value and affordability.

A recent study found that 62% of all jobs in Wisconsin will require some postsecondary training by 2020. Currently, Wisconsin has a 39% postsecondary attainment rate among our working-age population. This not only presents a workforce development challenge in meeting the needs of our employers, but also impacts the prosperity of our families. As seen in our neighboring state of Minnesota, increased levels of postsecondary attainment can be directly linked to their higher per capita income, which is around $5000 higher than in Wisconsin.

Clearly, our state’s potential for economic and income growth is dependent upon our ability to develop our workforce in an increasingly technical and innovative economy. Our state’s citizens and employers will be depending on the UW System, as well as the Wisconsin Technical College System, to meet those needs. Campuses are thinking outside of the box to meet this challenge through initiatives such as the Flex Option, whereby individuals can get credit for what they know, and UW-River Falls’ Hudson Center, which provides mid-career and adult learners a convenient off-campus location to complete or seek additional advanced degrees. In order to ensure our future economic success, it is critical that the UW System reflect the needs of our students and goals of our state.

In many cases, our campuses are already answering this call and working with local businesses and industries to offer solutions to training a quality workforce. Several examples from campuses around the state help demonstrate the valuable private-public partnerships that foster growth and benefit Wisconsin’s students and employers. In La Crosse, Trane has joined with UW-La Crosse to establish an internship program to meet the company’s recruiting needs. The Manufacturing Outreach Center at UW-Stout works with manufacturers to help encourage growth and improve profitability. UW-Whitewater’s Incubation Program provides opportunities for entrepreneurs to successfully launch their start-ups with the support and resources of the University community.

Additionally, UW campuses are performing the kind of ground breaking research that aids innovative new industries and creates solutions to everyday problems to improve our quality of life. UW-Milwaukee is the only postsecondary institution in the nation with a center on freshwater science, which is an important issue to our agricultural and tourism industries, as well as a growing issue worldwide given the scarcity of freshwater. At Oshkosh, the university is working to improve energy independence by unlocking the energy potential of livestock material and biodigesters. Finding ways to efficiently use our resources and deriving value from waste materials is a topic of study at UW-Stevens Point.

These local and statewide initiatives show that bringing the needs and know-how of the private sector together with the University’s expertise and resources are powerful drivers of Wisconsin’s economy and communities. By meeting the workforce needs of our state, UW campuses provide a vital service in encouraging economic development and job growth. We know that a stable and qualified workforce is a top consideration of businesses as they seek places to expand or move their operations. Without a pipeline of talented graduates, businesses will choose to create jobs elsewhere.

While we more frequently hear of the challenges and missteps of the UW System, the initiatives described above show the value added that UW campuses provide to our state. Even as there have been disappointments relating to past administrative practices, the UW System under the current leadership has been working collaboratively with state leaders to rebuild relationships and address concerns. I believe that our state will not have a better opportunity than now to entrust the leadership of the UW System, the Board of Regents, and chancellors with greater ability to manage their operations. Providing greater flexibilities as we hold the University accountable will provide them with the ability to be nimble and responsive to our changing economy and encourage new initiatives and policies that improve student outcomes. Let’s use this opportunity to build on the UW System’s successes and position it to continue to be a world renowned institution.

Federal EPA Overreach Threatens Jobs, Family Budgets

A recent wave of federal Environmental Protection Agency (EPA) regulations are receiving significant attention in Wisconsin and in states across the country, due to their potential impact on the everyday lives of residents and on economic development. These regulations may soon affect our gas and energy prices, our ability to use wood for home heating, and the ability to grow manufacturing jobs.

One of the EPA rules currently being considered would make significant changes to regulations on electricity generation, which has been called the “most sweeping federal regulations” on power plants in U.S. history. The Wisconsin Public Service Commission (PSC), which is responsible for oversight of utilities in our state, has submitted information to the EPA describing the negative effect the regulations as currently drafted would have on working families and economic growth. A study of the impact of these new regulations on energy users estimated that the average Wisconsin household would see electricity and gas bills increase by nearly $500 per year by 2020. In a study completed by PSC, electricity rate increases of around 30% in Wisconsin were predicted in order to comply with these new regulations.

At the same time that the EPA is seeking new regulations on energy production that would increase rates paid by homeowners, the EPA is also enacting more stringent rules affecting heating systems that utilize wood as a fuel source. Wood heating is an economical alternative for many Wisconsin families, particularly in rural areas, and our state is among the top ten states in the use of wood and pellet stoves for heating homes. While wood heating has proven to be a cost-effective and renewable home heating source, the new EPA regulations are expected to result in increased consumer prices for wood stoves and furnaces. I joined nearly forty of my legislative colleagues in sending a letter to the EPA expressing our concerns with the impact of these rules on the budgets of Wisconsin residents.

A third rule being pushed by the EPA seeks to reduce ground-level ozone standards to levels so low that they may be unattainable and indistinguishable from naturally occurring levels. In fact, the ozone levels being proposed by the EPA are so extreme that twelve national parks would not be in compliance, including the Grand Canyon and Yellowstone National Park. These new regulations are being proposed despite the fact that ground-level ozone has decreased by 33% since 1980 and the EPA scrapped similar proposed changes in 2011.

Areas that fail to meet ozone targets are classified as “nonattainment areas” and subject to stiff consequences. A number of counties in southeast Wisconsin have been subject to nonattainment classification and costly mandates, due in part to the effect of ozone levels in the greater Chicago area. While western Wisconsin has not been designated as a nonattainment area in the past, these new regulations may impact counties in our region should the Twin Cities area be classified as a nonattainment area as a result of the EPA’s proposed standards. The ozone regulations could require manufacturers in our area to compete with manufacturers throughout the Twin Cities metro area for credits before they would be allowed to expand their operations and create jobs.

While protecting our natural resources and ensuring clean air and water are important to our state and country, it is critical that regulations are enacted in a commonsense fashion and reflect the available technology to achieve compliance. Enacting costly, unattainable, and imprudent federal mandates on households, job creators, and state and local governments does not serve to improve our communities or economy. I look forward to continuing to work with my legislative colleagues to improve our environment using sound and rational protections rather than misguided Washington-driven policies.

Legislature Begins Work on State Budget

The State Legislature’s budget writing committee, the Joint Committee on Finance, formally began its work on the Governor’s budget proposal this week with briefings from state agencies. While legislators have been meeting with budget experts, agency officials, and interested parties since the Governor submitted his recommendations in early February, the briefings held this week were the first formal steps as the Legislature moves forward on the budget bill.

During these briefings, the committee had the opportunity to ask questions of state agencies on the provisions of the Governor’s budget proposal, including those relating to education, medical assistance, corrections, and natural resources. The briefings allow legislators to ask detailed questions about how various budget proposals would work and be implemented, as well as learning more about the cost or benefit to the state of specific provisions. These briefings can be viewed online at www.wiseye.org.

Later this month, the budget writing committee will be travelling around the state to receive input from citizens regarding their budget priorities. In an effort to ensure that residents of western and northwestern Wisconsin have a convenient opportunity to provide their input, I have consistently advocated for holding a budget hearing in our area to make the budget process accessible to area residents.

The co-chairs of the budget writing committee have released the schedule for this year’s budget hearings and I am pleased that one of the public hearings will again be held in our region. A public hearing in Rice Lake will be held on March 23rd at the UW-Barron County campus. In addition to Rice Lake, the budget writing committee has scheduled public hearings in Brillion, Reedsburg, and Milwaukee.

Individuals interested in testifying should register with legislative staff when they arrive at the hearing. Those that do not wish to testify, but would like to watch the proceedings, are also encouraged to attend. Written testimony can also be submitted to the committee by those unable to attend by submitting an e-mail at budgetcomments@legis.wisconsin.gov or by sending a letter to the Joint Committee on Finance, Attn: Joe Malkasian, Room 305 East State Capitol, Madison, WI, 53702.

Following the public hearings, the committee will begin its work on amending and adopting changes to the budget proposal. This process is expected to begin in early April and continue through May. More information on the budget writing committee can be found at http://legis.wisconsin.gov/lfb/jfc/, including a link to sign up for e-mail notifications of committee actions.

What are your thoughts on the Governor’s budget? I welcome your comments and input. Please visit my website at www.harsdorfsenate.com or call my office at 1-800-862-1092 or 608-266-7745.

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.”