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Oct. 19, 2004

“There are only 18 days until you get your TVs back!” This very apt description delivered by Assembly Speaker John Gard at a meeting (policy not politics) last week reminds us we don’t need to be reminded that we are in election season. Despite whatever reaction we have to being inundated by political ads, articles and rhetoric, we do need to be reminded of the right, privilege and duty to vote for those candidates and ideas that best reflect our own interests and values. We should also remind our colleagues, employees, relatives and friends to participate in our truly exceptional democratic process by exercising their right to vote on November 2^nd.

For our part, Tidbits is going to take a little break from reporting on election politics and summarize some recent policy developments. We do, however, encourage you to visit our Election Overview as we get nearer and nearer to decision day. Our next issue (October 29) will focus on an election preview just days before the general election and we will have a special election edition on November 3^rd or 4^th—depending on how ling it takes to count the ballots!

All of us at the Hamilton Consulting Group extend a very special Happy Anniversary to Forward Wisconsin which celebrated its 20^th year last week. Also, congratulations and best wishes to Pepi Randolph, the new President of Forward, and thank you to Mike Armiak who most recently served very ably in that position.

Policy Developments

Study: Wisconsin in Top Ten for Least Hospitable Business Tax Climate
A new Tax Foundation study [PDF doc, 52 pages] [Executive Summary, 4 pages] ranks Wisconsin among the 10 worst states with the least hospitable business tax climates. According to the study, the worst state tax codes tend to have:

• complex, multi-rate corporate and individual income taxes with above-average tax rates; 
• above-average sales tax rates that don’t exempt business-to-business purchases;
• complex, high-rate unemployment tax systems; and
• high overall state tax collections with few tax or expenditure controls.

The Tax Foundation’s 2004 State Business Tax Climate Index is constructed of five equally weighted component indexes. Wisconsin’s overall rank was 41, with rankings in each category as follows:

• Corporate Income Tax: 20
• Individual Income Tax: 32
• Sales and Gross Receipts Tax: 31
• Unemployment Tax: 31
• Fiscal Balance: 44

The study by the Tax Foundation, a Washington-based research organization, helps businesses compare competitive state tax systems and provide state legislatures a way of measuring a state's attractiveness for new businesses.

DOA Estimates Lottery Tax Credit
On Friday, October 15, the Wisconsin Department of Administration (DOA) estimated that the average lottery tax credit, to be distributed in December of this year, to be $93. There are 1,426,300 parcels that will share in $133,147,200.

Prevailing Wage Rule Questioned
On Wednesday, Oct. 6, the Assembly Labor Committee held a public hearing on a proposed DWD rule redefining prevailing wage. The Equal Rights Division of DWD sets and enforces prevailing wage rates that must be paid on state and municipal construction projects. 

Sections 66.0903(1)(g) and 103.49(1)(d), of the Wisconsin Statutes, delineate how the department determines the prevailing wage rate for a trade or occupation on a public works project. The prevailing wage rate for any trade or occupation means “the hourly basic rate of pay plus the hourly contribution for benefits.” The division has always used a weighted average methodology based on the pay of the highest-paid 51 percent of hours worked in that trade or occupation on projects in that area. 

Under the proposed rule, the department would determine if there is a majority of hours reported that receive a total economic benefit that is the sum of the hourly rate of pay and hourly fringe equivalent. 

John Mielke, director of government relations for Associated Builders and Contractors of Wisconsin, argued at the hearing that the change is not sufficiently justified by the department nor is it being pursued in an appropriate manner. 

The Legislative Council has also questioned whether or not the rule complies with legislative intent suggesting that if the Legislature had intended for the department to consider the sum of the prevailing rate of pay plus the benefits component, it could have specifically said so in the statute. 

PSC Approves Environmental Funding Plan for Utilities
The Wisconsin Public Service Commission recently approved a new financing method, called Environmental Trust Financing, which Wisconsin Electric Power Company may use to pay for environmental improvements and reducing emissions at their power plants. 

Environmental Trust Financing, created by 2003 Wis. Act 152, would save customers money on PSC-approved environmental upgrades when compared to traditional financing. We Energies applied to finance environmental improvements and pollution reductions costing almost $500 million. The Commission approved approximately $450 million, requiring that We Energies achieve a triple A bond rating when securing its financing and that a financial advisor will be retained by the Commission during this process.

Changes Sought in Rules for Designating Scenic Byways
Two legislative committees are seeking modifications to rules used by WisDOT in designating segments of state highways as scenic byways. Specific changes being requested include:

• Providing for segmentation of business areas from proposed byways.

• Including county and town roads under the program

• Setting criteria so that “scenic” is not the limiting item

Outdoor advertising industries have concerns regarding the proposal and how it will affect signage on roads that local groups would advance for the special designation.

Licenses Required for Wholesale Motor Vehicle Buyers
Starting Nov. 1, 2004, a new law will require motor vehicle buyers at wholesale auctions to hold a motor vehicle buyer's license from the Wisconsin Department of Transportation. 

This law, created by Wisconsin Act 216 [PDF doc], does not affect dealer principles and licensed wholesalers who may purchase vehicles at auctions without a motor vehicle buyer's license. This law only affects employees or agents who act as buyers on behalf of dealer principles and wholesalers. For more details, read the Wisconsin Legislative Council Memo. [PDF doc] 

PSC Decision Allows SBC Rate Increase
On Tuesday, Oct. 12, Wisconsin Public Service Commission gave approval to SBC to raise its wholesale rates by 13 to 20 percent. This decision, which mirrors a Sept. 30 vote by the PSC, means wholesale prices for competitors that lease the so-called “last mile” of wire to homes and businesses will increase by between $1.50 and $2. 

As noted in last weeks Tidbits, the Wisconsin increase is substantially below what SBC argued was necessary to cover their costs. Competitors are, however, opposed to any increases and may file an appeal. 

Coal Plant Expansion Challenged in Dane County Court
A judge in a Madison courtroom heard testimony for and against the proposed Oak Creek Coal Plant that Wisconsin Energy hopes to begin construction on early next year. Dane County Circuit Judge David Flanagan questioned both sides of the issue, and said he hopes to have a decision soon. 

Led by S.C. Johnson & Son Inc. of Racine, opponents of the project expressed concerns about discharges of water containing mercury into Lake Michigan. Supporters said that the coal-fired plant would be less expensive to operate than a plant burning natural gas and far cleaner than the coal plant that is running at the site today. 

The expansion in Oak Creek will add two coal-fired generating units at a total cost of $2.15 billion, according to We Energies. The Public Service Commission of Wisconsin approved the expansion project in November 2003. 

Marquette Interchange Reconstruction Officially Begins
Governor Doyle has announced the kick-off of the Marquette Interchange Reconstruction, a project that will be completed in four phases over four years. Touted as a key infrastructure element in his Grow Wisconsin economic development plan, the project represents an $810 million investment into the infrastructure of the state. "Infrastructure is key to job growth, and this project will affect jobs throughout Wisconsin," said Doyle. 

Seniors Better Off in SeniorCare Program says Doyle
Governor Jim Doyle recently announced that about 94 percent of seniors in Wisconsin’s SeniorCare program are better off staying in the program than trying the new federal Medicare prescription drugs benefit when it starts in January 2006. Governor Doyle made the announcement after he released a detailed report, compiled by the Department of Health and Family Services that compares SeniorCare to the new prescription drugs program under Medicare. 

Doyle requested the Department of Health and Family Services to compile a report comparing Wisconsin’s SeniorCare program to the new prescription drugs benefit offered under Medicare. The study is limited to analyzing the potential costs to SeniorCare participants beginning in January 2006 when they must choose between remaining in SeniorCare or enrolling in a Medicare drug benefit plan. 

Special Committee Identifies Proposals for Legislative Consideration
Items discussed by individuals and organizations who testified at meetings of the Senate Select Committee on State and Local Relations may be recommended for consideration by the next legislature. The items are contained in a report prepared by the Legislative Council.

The committee, chaired by Sen. Ron Brown, was created by former Senate Majority Leader Panzer at the end of July and charged with looking "at ways to encourage economic development locally and regionally, as well as ways to give local governments the tools they need to reduce their own costs."

Wisconsin Politics

Supreme Court Lifts Stay on Burke Trial
In an appeal to the state Supreme Court, former Sen. Brian Burke said his trial, originally scheduled for Oct. 11, should not proceed until the court ruled in the cases involving charges against other legislators. A five-member majority of the court said the Burke case presents "significantly different" issues and remanded the case to the trial court to schedule a trial date.

Federal Developments

U.S. Supreme Court Upholds Constitutionality of “Do Not Call” Registry
The U.S. Supreme Court Monday let stand a ruling by the United States Court of Appeals for the 10th Circuit upholding the constitutionality of the Federal Trade Commission's national Do Not Call Registry. Without comment, the justices rejected an appeal by commercial telemarketers against the lower-court ruling. 

The Appeals Court unanimously ruled that the do-not-call list was a valid restraint of commercial speech because it "targets speech that invades the privacy of the home, a personal sanctuary that enjoys a unique status in our constitutional jurisprudence." 

In May, three marketing groups, The American Teleservices Association, Mainstream Marketing Services, and TMG Marketing, appealed the lower court's ruling. They argued that the Do Not Call Registry infringed upon their right to free speech; that it unfairly exempted political and charitable calls; that consumers already had less restrictive means to block unwanted calls; and, that the imposition of fees on telemarketers represented an unfair tax on protected speech. 

Under the 2003 federal law, businesses face fines of up to $11,000 if they call people who sign up for the registry -- unless they have recently done business with them. Charities, pollsters and callers on behalf of politicians, however, are exempt. 

Congress Extends Authorization for Transportation Funding
 After a full year of delay on passing a new federal transportation authorization bill, Congress again passed an extension to the existing TEA 21 package that will run through Memorial Day of 2005. 

[In a related Wisconsin action, checks totaling $96.8 million recently were mailed or electronically transferred to local governments this week by the Wisconsin Department of Transportation: $93.3 million in General Transportation Aids to 1,922 units of government; $3.2 million to 121 municipalities for Connecting Highway Aids; and $260,200 to Milwaukee County for Expressway Policing Aids. This year local governments will receive a total of approximately $387.2 million from these programs.] 

Congress Renews Wind Energy Production Tax Credit
President Bush last week signed a new federal tax credit for production of renewable energy. H.R. 1308 includes an extension of the Federal Production Tax Credit (PTC) for renewable energy sources. The PTC provides a tax credit of 1.5 cents per kilowatt-hour to producers of energy generated by wind and biomass sources. 

The PTC, which had expired Dec. 31, 2003, will be extended retroactively from that date to December 31, 2005.  Alliant Energy says it will now go ahead with plans to add 230 megawatts of wind generation in its Wisconsin and Iowa service territories.

Political News

Wisconsin's business tax climate ranks among bottom 10 in U.S.: Wisconsin State Journal, Oct. 14, 2004.

Familiar foes face off in District 1 race: Green Bay Press-Gazette, Oct. 13, 2004.

Health care reform is top issue in Magnum-Baldwin House race: Milwaukee Journal Sentinel, Oct. 13, 2004.

Corporate tax bill turned into brazen pork fest, critics contend: Milwaukee Journal Sentinel, Oct. 13, 2004.

State candidates need answers to health-care issues: Green Bay Press-Gazette, Oct. 13, 2004.

Gathering examines causes, effects of health care crisis: Marshfield News Herald, Oct. 13, 2004.

U.S. Mint rolls out its first cow coin for Wisconsin: Milwaukee Journal Sentinel, Oct. 13, 2004.

Top court allows judge to schedule trial in Burke case: Milwaukee Journal Sentinel, Oct. 13, 2004.

Assembly workers take leave to campaign: Wisconsin State Journal, Oct. 12, 2004.

Plan would set property tax credit: Wisconsin State Journal, Oct. 12, 2004. 

Candidates’ barrage of state visits continues Friday: Green Bay Press-Gazette, Oct. 12, 2004.

Political spotlight rivals football (opinion): Green Bay Press-Gazette, Oct. 12, 2004.

Congressional package includes wind energy tax credit: Janesville Gazette, Oct. 12, 2004.

Legislative races raise record finances: La Crosse Tribune, Oct. 11, 2004.

In Swing-State Wisconsin, Foreign Policy and Domestic Security Stir a Senate Race: New York Times, Oct. 11, 2004. [Registration required.]

Regional cooperation called key to growth: Milwaukee Journal Sentinel, Oct. 11, 2004.

U.S. executives yet to feel effects of global competition: Milwaukee Journal Sentinel, Oct. 11, 2004.

Manufacturers go lean: Marshfield News Herald, Oct. 10, 2004.

Entrepreneurs Need Investors: Wisconsin State Journal, Oct. 9, 2004.

Employment Figures Are Weak: Wisconsin State Journal, Oct. 9, 2004.

State To Seek More Money From Proposed Kenosha Casino: Wisconsin State Journal, Oct. 9, 2004.

Legislators split on party lines over what tax 'freeze' would have done: Milwaukee Journal Sentinel, Oct. 9, 2004.

Decision in coal plant case delayed: Milwaukee Journal Sentinel, Oct. 9, 2004.

Upcoming Fundraisers

Tuesday, Oct. 19

• Tom Tiffany (R) 12th SD candidate, Florence

• Rep. Mary Williams (R-Medford), Medford

• Terry Moulton (R) 68th AD candidate, Eau Claire

Wednesday, Oct. 20

• Sen. Scott Fitzgerald (R-Juneau), Lake Mills

• Eric Peterson (R) 16th SD candidate, Madison

• Sen. Dave Hansen (D-Green Bay), Green Bay,

• Reince Priebus (R) 22nd SD candidate, Bristol

• Dave Magnum (R) 2nd CD candidate, Monona

• Tom Tiffany (R) 12th SD candidate, Merrill

• Rep. Debi Towns (R-Janesville), Buckhorn Supper Club on Lake Koshkonong

Thursday, Oct. 25

• Rep. Mark Gundrum (R-New Berlin), New Berlin

• Tim Michels (R) US Senate candidate, Milwaukee

• Rep. Samantha Kerkman (R-Powers Lake), Twin Lakes

Friday, Oct. 22

• Reince Priebus (R) 22nd SD candidate, Kenosha

Monday, Oct. 25

• Tom Tiffany (R) 12th SD candidate, Tomahawk

• Sen. Bob Wirch (D-Kenosha), Kenosha

• Tom Tiffany (R) 12th SD candidate, Antigo

• Milwaukee County GOP, West Allis

• Mark Miller (D) 16th SD candidate, Madison

Friday, Oct. 29

• Brad Pfaff (D) 32nd SD candidate