Hamilton Political Tidbits – May 27, 2016

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Political Tidbits
Compiled by
The Hamilton Consulting Group
May 27, 2016

With the halls of the Wisconsin Legislature practically empty, the focus over the past several weeks in Wisconsin has been on several key state and federal judicial actions. Last week, the Wisconsin Supreme Court ruled 2011 Act 21 unconstitutional in regards to the governor's and his administration's oversight of the state superintendent. In addition, Attorney General Brad Schimel recently released his opinion on the Department of Natural Resource's authority over high capacity well permits. On the federal level, Wisconsin has joined 10 other states suing the Obama administration over guidance that directs schools to allow transgender students to use facilities according to their gender identities. You can read about all this in today's Tidbits .

In state election news, nomination papers are due on June 1, leaving only a small window for candidates to file for the November state elections. This week, Tidbits highlights two seats that are already heating up: Sen. Tom Tiffany's (R-Hazelhurst) district race and the race for Rep. Dave Heaton's (R-Wausau) open seat.

Lastly, as we near the end of the fiscal year, the attention is all on the state's bottom line. Below, you can read about the state's announcement to defer a debt payment, and the Department of Revenue's recent report on state tax collections.

If you wish to receive additional information about a topic addressed in  Tidbits,  please do not hesitate to contact a member of the Hamilton Consulting Team.

Court of Appeals Puts a Hold on Dane County Right to Work Decision

On May 24, a state court of appeals reversed Dane County Circuit Judge William Faust's ruling not to grant a stay of his controversial decision that the state's new right-to-work law was unconstitutional. The appeals court decision allows the right-to-work law to be in effect and enforceable pending appeal of Faust's underlying decision.
Wisconsin became the 25th right to work state last year. Right-to-work laws bar businesses and unions from reaching labor agreements that force workers to pay fees to the union. Various state unions challenged the constitutionality of the law.
On April 15, 2016, Faust granted the unions' request for summary judgment, concluding that the right-to-work law effects an unconstitutional taking of private property of Wisconsin's labor organizations. As a result, the Dane County court enjoined the state and the attorney general from enforcing the statute.
The decision by the Wisconsin Court of Appeals District 3, based in Wausau, does not directly go to the merits of the case. But presiding judge Lisa K. Stark rested her decision on the finding that the law was presumed constitutional and that the state established "there is sufficient likelihood of success on appeal to warrant the grant of the stay."

Read more, with links to the attorney general's memo and related press releases by Schimel and WMC.
AG Opinion Validates Act 21 Limits on Agency Authority

On May 10, 2016, Attorney General Brad Schimel issued a formal opinion finding that 2011 WI Act 21 requires explicit delegation of authorities to agencies, making it clear that regulatory mandates may no longer arise from implied authority.
Whether enacting rules, imposing permit conditions, or exercising public trust authority, the Department of Natural Resources (DNR) and other agencies must point to explicit statutory delegations or their actions are legally void and unenforceable.
Read for more on key AG findings.
Eleven Applicants Vie for Open Wisconsin Supreme Court Seat

Eleven applications have been submitted to Gov. Scott Walker to replace Wisconsin Supreme Court Justice Prosser, who announced his retirement in early May. The seat opens on July 31 after Prosser's resignation takes effect.
The applicant selected by Walker will hold the seat until it opens for an April 2020 election. Many consider this to be a legacy appointment by Walker considering some of the younger applicants may sit on the state's highest bench for over three decades.
Notable applicants of interest to those in the lobbying business include:
  • Judge Mark Gundrum, Wisconsin District II Court of Appeals, appointed by Walker in 2011. Served as Waukesha circuit court judge from 2010 to 2011 and was a state representative from 1998 to 2010.
  • Judge Brian Hagedorn, District II Court of Appeals, appointed by Walker in July 2015. Also served as chief legal counsel for the governor and was an assistant attorney general at the Wisconsin Department of Justice.
  • Public Service Commission Chairperson Ellen Nowak, appointed by Walker in 2011. Also previously served as chief of staff to Waukesha County Executive Dan Vrakas and legal counsel and chief of staff to the Speaker of the Assembly.
Supreme Court Upholds Independence of State Superintendent of Public Instruction

In a split opinion, the Wisconsin Supreme Court upheld lower court decisions that 2011 Wisconsin Act 21 (Act 21) is unconstitutional as applied to the Superintendent of Public Instruction (SPI) and the Department of Public Instruction (DPI).
Act 21 amended various provisions in the statutes that set forth procedures agencies must follow when promulgating administrative rules. The provisions the court found problematic related to the governor's ability to withhold approval of SPI and DPI rules.

Read more about the Supreme Court's decision.

State Defers Debt Payment

At the beginning of May, the Department of Administration (DOA) announced their decision to defer the payment of $101 million commercial paper principal. Under the 2015-17 biennial budget, the state was expected to retire $131.7 million in commercial paper on May 1, 2016. With this delay of the $101 million payment, the Legislative Fiscal Bureau (LFB) projects that the delayed payment will be amortized over an eight-year period, resulting in $2.2 million in additional interest payments.

Even without the extra $101 million cushion to the bottom line, the recent Department of Revenue (DOR) report on tax revenues through April 2016 show the state is on track with projected estimates. The DOR report shows that the collections in FY 2016 are up 4.5 percent compared to the same period in FY 2015.

12th Senate District: Incumbent Tom Tiffany

Senate Republican incumbent Tom Tiffany sits in a good place heading into his 2016 re-election campaign. The Joint Finance Committee member works his district hard, has a significant fundraising advantage and may benefit from some infighting within the Democratic primary.

After one term in the state Assembly, Tiffany ran for the open 12th District Senate seat in 2012, where he cruised to a 56-40 victory over Democrat Susan Sommer. By area, the district is one of the largest and covers a large swath of northwestern Wisconsin including Merrill, Rhinelander and Oconto Falls.

If the Senate Democrats have any chance of taking back the majority, this seat is one they have to win. It is a seat that for many years was represented in the Senate by Democrats Roger Breske and Jim Holperin  and the  numbers should be better for Democrats in a presidential election year.

Read more about Sen. Tiffany's competition.
85th Assembly Seat (Open): Pat Snyder vs. Mandy Wright

Somewhat surprisingly, freshman Republican Dave Heaton decided not to run again for his Wausau-based Assembly seat after only serving one term. Heaton's departure makes way for round two between Republican Pat Snyder and Democrat Mandy Wright, in what is expected to be a close race.

Snyder is a former conservative talk show host and current district staffer for U.S. Rep. Sean Duffy. Wright is an educator and former Assemblywoman from the 85th district.

Wisconsin Joins Other States in Suit to Overturn Obama's Transgender Guidance

Wisconsin joins Texas and nine other states challenging the Obama Administration's new Title IX transgender guidance. Several local school districts are also participating.
Under the guidance, schools must allow transgender students access to bathrooms and locker rooms consistent with their self-professed gender identity.
In his May 25 press release , Wisconsin Attorney General Brad Schimel states that the new guidance conflicts with Wisconsin's law that already prohibits discrimination based on "sex" in the educational setting. In a broader sense, he argues that "Wisconsin sovereignty and independence have once again been undermined by the federal government."
Read more, with links to the states' complaint and the federal guidance.

Obama Doubles Overtime Exemption to $47,476

The Obama Administration's new overtime rule will double the salary threshold for "white collar" workers to $47,476. The current exemption, set in 2004, is $23,660. The new threshold that will impact 4.2 million salaried workers goes into effect on December 1, 2016. Under the new rule, the threshold will automatically increase every three years.
Business groups say the new rule will force millions of salaried professionals to be reclassified as hourly wage workers. They argue that small businesses, nonprofits, and public sector employers will be specially hurt. The U.S Department of Labor estimates businesses will end up paying workers an additional $1.3 billion a year.

Read more about the new rule.

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News Clips 
Economic Development
WEDC reviewing 222 awards for tax credit discrepancies : Wisconsin State Journal, May 27, 2016.
25 stadium tax uses up for consideration by city : Green Bay Press Gazette, May 26, 2016.
Oshkosh group discussing D-League affiliate with Bucks : Milwaukee Journal Sentinel, May 26, 2016.
Overtime rule sparks intense political fight : River News Online, May 25, 2016.
Wisconsin employers may see drop in unemployment taxes : Eau Claire Leader-Telegram, May 25, 2016.
Bucks arena design wins final Common Council approval : Milwaukee Journal Sentinel, May 24, 2016.
Home sales, values continue climbing in tightening real estate market : Milwaukee Journal Sentinel, May 23, 2016.
Garbage entrepreneurs are turning food waste into a business : Milwaukee Journal Sentinel, May 23, 2016.
Arena bonds approved; 'no tax increase' needed to fund interest : Milwaukee Business Journal, May 23, 2016.

County walls off water near beach to keep it clean : Wisconsin State Journal, May 27, 2016.
Lead-poisoned water targeted by new Wisconsin DNR loans : Wisconsin State Journal, May 27, 2016.
Six start-ups to pitch at Water Summit in June : Milwaukee Journal Sentinel, May 26, 2016.
Riverkeeper group sues DNR over Estabrook Dam : Milwaukee Journal Sentinel, May 25, 2016.
Man-made islands to cleanse pollutants from pond : Milwaukee Journal Sentinel, May 25, 2016.
Board adopts wetland plan : Superior Telegram, May 24, 2016.
Russ Feingold jabs Ron Johnson on environment at Grant Park event : Milwaukee Journal Sentinel, May 23, 2016.
Michigan senators want higher liability for Great Lakes oil spills : Milwaukee Journal Sentinel, May 23, 2016.

Appeals court judge orders Wisconsin's right to work law reinstated : Milwaukee Journal Sentinel, May 24, 2016.
Muslims file complaint against Ariens Co. : Sheboygan Press, May 24, 2016.
Witness says recent Wisconsin voting laws are discriminatory : Wisconsin State Journal, May 24, 2016.
Judge dismisses Menominee hemp lawsuit : Green Bay Press Gazette, May 24, 2016.
U.S. Supreme Court allows secret debate in John Doe filing : Milwaukee Journal Sentinel, May 23, 2016.
Wisconsin right to work law inspires federal suit : Courthouse News, May 23, 2016.


Utilities & Energy
Zima: Board "stacked against" Shirley Wind critics : Green Bay Press Gazette, May 25, 2016.
New east side apartment building is green from top to bottom : Milwaukee Journal Sentinel, May 25, 2016.
UW-Madison team develops wind turbine for cell towers in rural India : Milwaukee Journal Sentinel, May 24, 2016.
Orion Energy wins LED contract for retail distribution center : Milwaukee Journal Sentinel, May 23, 2016.
Minnesota bill would support bird, bee habitat for solar : Midwest Energy News, May 23, 2016.
Shirley Wind farm debate continues : Green Bay Press Gazette, May 23, 2016.
Alliant Energy proposes a rate hike for 2017 and 2018 : Wisconsin State Journal, May 23, 2016.

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