Vos fires, businesses fire back

On Wednesday, James Wigderson, the new proprietor of RightWisconsin, reported:

Last week Assembly Republicans saw their plan to tax heavy trucks shot down by several members of the state Senate and a coalition of business groups. Now Assembly Speaker Robin Vos, R-Rochester, Assembly Majority Leader Jim Steineke, R-Kaukauna, and Joint Finance Committee Member Rep. John Nygren, R-Marinette, are throwing up their hands and asking those business groups to identify how they would solve the transportation funding issue.

In a memo to Wisconsin Manufacturers and Commerce (WMC) and 16 other business organizations, the Assembly Republicans said the business organizations have until Monday to offer their ideas.

“Time is of the essence,” the memo said in bold type. “In order to be considered part of a potential solution, we ask that you please get back to us by Monday, July 10 with how you would propose to close the $1 billion deficit so we can upgrade the roads that you depend on to run your businesses.”

As Bill Osmulski at the MacIver Institute has pointed out, the transportation budget “shortfall” is closer to $449 million, not $1 billion as the memo indicated.

The proprietor of Wigderson Library & Pub reported this Saturday:

Wisconsin Manufacturers & Commerce (WMC) and Walmart are not waiting until a Monday deadline from Assembly Republican leadership to offer their solutions for the state’s transportation budget impasse. WMC and Walmart were two of the organizations that were opposed to a heavy truck tax proposed by Assembly Republicans.

A memo on Wednesday from Assembly Speaker Robin Vos, R-Rochester, Assembly Majority Leader Jim Steineke, R-Kaukauna, and Joint Finance Committee member Rep. John Nygren, R-Marinette, gave the business groups an ultimatum: They either had to offer solutions to the transportation funding impasse by Monday, or they were out of the budget process.

“Time is of the essence,” the memo said in bold type. “In order to be considered part of a potential solution, we ask that you please get back to us by Monday, July 10 with how you would propose to close the $1 billion deficit so we can upgrade the roads that you depend on to run your businesses.”

On Friday, Scott Manley, the Senior Vice President of Government Relations for WMC responded with a three-page letter to Vos, Steineke and Nygren. Manley questioned giving more money to the Department of Transportation (DOT) saying they were “troubled by the findings of the nonpartisan Legislative Audit Bureau report issued earlier this year that found sixteen DOT projects had collectively run over budget by more than $3 billion.”

“The same audit also found that DOT failed to save $289 million by not meeting its own performance goals,” Manley wrote. “This magnitude of fiscal mismanagement is unacceptable to taxpayers, and would never be tolerated in the private sector.”

However, Manley said he was encouraged by the reforms begun under new DOT Secretary Dave Ross. Through his efforts, $65 million in existing funds were re-directed and over $44 million in authorized transportation borrowing has not been issued,” Manley wrote. “WMC is encouraged by these positive developments and we applaud the leadership of Secretary Ross to implement changes to ‘business as usual’ at the DOT.”

Manley’s letter offered seven different ways the DOT and the legislature could save money in the transportation budget, starting with a full repeal of the state’s prevailing wage law. “Wisconsin’s prevailing wage law artificially inflates wages above the market rate for state transportation building projects,” Manley wrote.

Manley also suggested consolidating the projects where federal funds are used to reduce the effect of the Davis Bacon law, the law regarding wages on federal projects.

Other suggestions from Manley include eliminating 400 DOT engineers, move to a “practical design” standard to stop over-building on projects, and aligning federal and state environmental reviews to streamline the process.

As far as increasing revenue, Manley said, given the opposition from Governor Scott Walker and Senate Republicans, “WMC does not believe revenue enhancements are politically viable in this budget cycle.”

However, WMC does endorse raising the gas tax five cents per gallon and raising auto registration fees by $25. They also suggested using the two cents per gallon currently collected for the Petroleum Environmental Cleanup Fund Award (PECFA), saying the remaining costs of the program could come from other sources. PECFA is scheduled to end in 2020.

Finally, Manley suggested moving more funds from the general fund “either by increasing the current 0.25% transfer, or transferring a portion of the sales tax from motor vehicle sales and/or motor vehicle parts and accessories.”

Lisa Nelson, the director of public affairs for Walmart, suggested coupling raising the gas tax with eliminating the minimum markup on petroleum products, currently at 9.18 percent. “We are in alignment with WMC’s stated support of an increase in retail gasoline taxes up to five cents per gallon,” Nelson wrote. “But only if the consumer impact of such an increase is mitigated by the simultaneous elimination of the minimum markup on motor vehicle fuel.”

“None of the funds from this markup go into the transportation fund and support our roads,” Nelson wrote. “ Unlike gasoline taxes, none of the markup pays for Wisconsin’s infrastructure. It’s an onerous big-government mandate that hurts consumers.”

The Associated Press previously reported Neal Kedzie, president of the Wisconsin Motor Carriers Association, said Vos knows the organization is in favor of raising the gas tax and taking 100 percent of the sales tax on rental cars and auto parts for the transportation budget.

I will always take the side of business against politicians, so you can guess where I stand on this. I would extend Manley’s idea to devote all sales tax proceeds from motor vehicle and vehicle parts sales to transportation. It represents a serious lack of leadership on Vos’ part to (1) not acknowledge that Wisconsin is still one of the highest taxed states in the nation and (2) to not be willing to do something positive about that.

 

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One thought on “Vos fires, businesses fire back

  1. The legislature could also enact the forgotten and repressed 2nd part of Act 10. When Act 10 was passed Senators Olsen, Schultz and Wanggaard hesitated. As a result the police, firefighters, prison guards, sheriffs and a few other groups were carved out of the reforms. The intention was to circle back later. It was thought that the first part got them 2/3rd of the way towards a full repeal. It passed and saved something like $1B/yr. That would mean the second part would save around $500M/yr (according to MacIver we’re looking or $449M. Gov Walker says $500M. Speaker Vos said we had a $300M problem in January and about a month ago Rep Nygren said it was over $1B.). Any money on the legislature contracting situational amnesia about the 2nd part? Whatever happened to prevailing wage or the repeal of Davis-Bacon? The DOT audit outlined savings too. Sec’y Ross said he needed time to enact the audits finding and didn’t need a tax increase for now. There are clear avenues to pursue that don’t include a tax increase that easily take us over the yet to be clearly defined financial hurtle.

    This was a good article but WMC recommending a gas tax increase is ignorant of the reality of the savings being left on the table … assuming we had a courageous legislature that would follow through.

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