Forward Janesville Position Statements

FJI OPPOSES "COMBINED REPORTING"

February 21, 2008 | Forward Janesville's Board of Directors has taken a position in opposition to "combined reporting," which is included in the Senate's economic development package (SB 510).

Combined reporting would require large, multi-state businesses to report their Wisconsin and non-Wisconsin tax burden as a single unit. Current law uses separate entity reporting and imposes corporate franchise or income taxes on each separate corporation doing business in Wisconsin. These entities file separate tax returns reporting net income.

By imposing Wisconsin taxes on economic activity outside Wisconsin, combined reporting represents a job-killing tax increase for Wisconsin businesses. Combined reporting would increase business taxes by $90 million, and would introduce yet another administrative hurdle for businesses who are already dealing with an overly complicated tax code.

Combined reporting will reduce our state's competetiveness, and will make Wisconsin's already challenging business tax climate that much harsher. Taxes matter in economic development decisions, and corporate tax rates continue to be a key factor in site location decisions. As we stand on the edge of a possible economic slowdown, combined reporting is the wrong message to send to our state’s businesses.

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FJI OPPOSES SB 195, MANDATED SCHOOL CONFERENCES & ACTIVITIES LEAVE

December 21, 2007 | Forward Janesville’s Board of Directors has voted to oppose Senate Bill 195, a bill regarding mandated leave for school conferences and activities.

Under the Family Medical Leave Act (FMLA), an employer employing at least 50 individuals on a permanent basis in Wisconsin must permit an employee to take six weeks of family leave and two weeks of medical leave in a 12-month period. SB 195 would allow any employee of a qualifying employer to take 16 hours per year for school conferences and activities that cannot be scheduled during nonworking hours.

While Forward Janesville certainly supports active parental participation in school conferences and activities, we believe that Senate Bill 195 is a solution in search of a problem. Numerous employers who are subject to FMLA already have mechanisms in place to allow their employees to attend school functions, including (but not limited to) personal time and vacation. Compliance with this government mandate will create more red tape for Wisconsin businesses, and will likely increase the cost of doing business.

Additionally, the lack of lack of agreement between Wisconsin’s FMLA and the federal FMLA makes the act difficult for employers to administer. Until broad conformity occurs between Wisconsin’s FMLA and the federal FMLA, Forward Janesville opposes any expansion of the state FMLA.

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FINALLY! LEGISLATURE, GOVERNOR REACH STATE BUDGET AGREEMENT

October 29, 2007 | The state budget debacle has ended, as Governor Doyle signed the long-overdue biennial spending plan into law on October 25. Both houses of the state legislature passed the agreement on October 23, a mere 115 days after the state’s self-imposed July 1 budget deadline. The bill, which raises cigarette taxes and transportation fees but rejects many tax increases sought by the Governor, includes some important victories for the state’s business community, including rejection of government-run health care. The agreement raises state spending by 6.6% over the biennium, far less than the 8.5% proposed by the Governor or the 23% hike included in the Senate’s budget proposal.

While the dust surrounding the agreement is still clearing, most of the major details have become apparent. Here is a summary of the major provisions, with some help from Wisconsin Manufacturers and Commerce:

Taxes and Fees

Cigarette Tax—The budget agreement increases the cigarette tax by $1.00 per pack on January 1, 2008. Combined with a tax increase on other tobacco products, tobacco-related taxes will rise by $411 million over the biennium. This revenue will be used to fund various health care initiatives.

Hospital Tax—The agreement rejects the Governor’s proposal to create a new tax on hospitals. This tax would have cost hospitals $418 million, which proponents say would be offset by $575 million in additional federal Medicaid funds.

Real Estate Transfer Tax—The budget eliminates the Governor’s proposal to double the real estate transfer tax—paid by the seller—from 30 cents to 60 cents per $100 of value. This provision would have added hundreds to the cost of selling a home.

Vital Records Fees—Under the agreement, getting a copy of a birth certificate will go from $12 to $20, while a copy of a death, marriage or divorce record will also cost $20 (up from $7).

Combined Reporting—The budget agreement rejects a Senate provision requiring combined reporting for corporate income taxation. The Senate’s budget would have required corporations engaged in a unitary business to file a combined report for state income and franchise taxes. Under this scheme, the income of non-Wisconsin subsidiaries could be attributed to and taxed in Wisconsin.

Sales Tax on Digital Downloads—The agreement does not contain the Governor’s recommendation to impose the state sales tax on digitally downloaded materials such as music, books and software.

Retirement Income Tax Exclusion—The budget includes a Senate provision creating an individual income tax exclusion for certain retirement income. The tax exclusion would be up to $5,000 per person (65 or older) and limited to taxpayers with adjusted gross incomes of $15,000 or less ($30,000 for married-joint filers).

Health Care

Healthy Wisconsin—The budget agreement eliminates “Healthy Wisconsin,” the Senate Democrats’ $15.2 billion universal health care proposal. The proposal would have been funded by a new payroll tax to be paid by employers (10.5% of Social Security wages) and employees (4.0%). FJI Position: FJI vehemently opposed Healthy Wisconsin, as the plan is explosively expensive, and does little to address the root causes of rising health care costs, and will make our state a magnet for the unhealthy and uninsured.

Health Savings Accounts Tax Deduction—The agreement rejects an Assembly provision to create a state income tax exclusion for deposits to and earnings on health savings accounts (HSAs). Wisconsin is one of four states taxes health savings accounts. FJI Position: FJI has long supported an HSA income tax exclusion, which will further encourage the use of HSAs.

Workplace Wellness Tax Credit– The budget rejects an Assembly provision to create a tax credit for workplace wellness programs. FJI Position: While we did not take a position on this issue, we remain very interested in these kinds of consumer-driven health care initiatives.

Tax Deduction for Health Insurance Premiums—The budget agreement includes a proposal to create a new state income tax deduction for health insurance premiums paid by employees. This deduction, which will eventually cut income taxes by nearly $150 million, will begin in tax year 2008. FJI Position: Again, FJI did not take a position on this issue, but believes this provision will help the business community address the rising cost of health care coverage.

Autism/Mental Health Insurance Mandates—The agreement rejects the Governor’s proposal to require Wisconsin health insurance plans to provide coverage for treatment of autism spectrum disorders. Additionally, the budget does not include a Doyle-backed provision to increase the mandated level of insurance coverage for mental health disorders.

Transportation

Transportation Fund Integrity—The budget agreement rejects the Governor’s proposed transfer of 16 General Fund appropriations to the Transportation Fund. FJI Position: FJI strongly opposed this back door transfer. During the last two budget cycles, nearly $1.1 billion has been taken from the Transportation Fund to help balance the state budget. These transfers have forced the state to borrow money for transportation projects, leading to higher debt services expenses and a reduction in our purchasing power.

Transportation Fees—The budget raises transportation fees by about $274 million. Next year, it will cost $24.50 more to procure a title, and the annual vehicle registration fee will go up by $20.

Oil Profits Tax—The agreement does not contain Doyle’s plan to levy a 2.5% tax on oil company gross revenues.

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FJI OPPOSES "HEALTHY WISCONSIN"

July 23, 2007 | Forward Janesville recently announced its opposition to the State Senate’s “Healthy Wisconsin” proposal. Healthy Wisconsin, a universal health care plan that would be funded by a payroll tax on workers and their employers, is included in the Senate’s biennial budget proposal.

After several weeks spent gathering input from its Members and closely studying the proposal, FJI has concluded that the plan could cause serious harm to businesses across the state. The organization has several major concerns about Healthy Wisconsin, including:

The plan is likely to get more expensive over time due to wage growth and escalations in health care costs, forcing the state to raise taxes again to pay for it.

Healthy Wisconsin does little to address the root causes of rising health care costs, such as unhealthy lifestyles, poor management of chronic diseases, and over-utilization of healthcare services.

The plan could have a very negative impact on Wisconsin’s workforce. Many full time workers would prefer to transition to part time employment or retire, but would lose their health care coverage by doing so. Since Healthy Wisconsin provides coverage to nearly all citizens, it creates a disincentive to work. This could create a huge unanticipated hole in Wisconsin’s already dwindling workforce.

Finally, the plan will create unique challenges for Wisconsin’s border counties, as our communities could become a magnet for uninsured people from neighboring states who wish to take advantage of Healthy Wisconsin. This possible influx could lead to a rapid and unforeseen cost escalation, making further tax increases necessary.

“Year after year, Forward Janesville Members cite access to affordable health care coverage as the top concern facing their businesses,” said Dan Cunningham, FJI’s Vice President of Government Relations. “While we commend Senator Robson and the Senate for bringing the debate on the future of health care in Wisconsin to the forefront, we just don’t believe that Healthy Wisconsin is the right way to achieve health care reform.

“In our view, allowing state government to get into the health insurance business a dangerous idea,” Cunningham added. FJI supports market-driven health care reforms aimed at increasing consumerism, competition and personal responsibility to help keep costs under control.

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FJI OPPOSES UNREALISTIC "CAFE" MANDATES

June 18, 2007 | The United States Congress has begun to consider legislation to mandate a substantial increase in Corporate Average Fuel Economy (CAFE) standards for cars and light trucks. CAFE, which was enacted following the Arab Oil Embargo in the mid-1970s, is a sales-weighted average of the fuel economy of each automaker’s annual passenger car and light duty truck production.

While the demand for fuel-efficient vehicles continues to grow, auto industry experts are unanimous in their belief that unrealistically high CAFE standards are could have disastrous consequences for the American auto industry. In a May 9 Detroit Daily News editorial, the credit rating agency Standard and Poor’s stated, “the proposed (CAFE) regulations pose a real risk to global automakers’ financial performance, particularly as some are already under pressure from razor-thin margins.” The article punctuates this point by concluding, “Congress should be aware of the very real possibility that it could bankrupt a key American industry.”

Janesville’s General Motors Assembly Plant supports thousands of high-quality, high-paying jobs that are vital to Janesville’s economy. The CAFE standards increase could have a devastating impact on our local economy, as it would affect GM, its numerous local suppliers and distributors, and consumers, as this proposal could significantly raise the price of a new vehicle. Additionally, the cost of complying with this mandate will force automakers to abandon their ongoing alternative fuel and vehicle technology research.

FJI urges lawmakers to bear in mind the possible negative ramifications of unrealistic CAFE mandates, and to support common sense legislation that raises fuel economy standards while protecting the American auto industry.

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FJI SUPPORTS HEALTH SAVINGS ACCOUNT LEGISLATION

March 21, 2007 | Forward Janesville has registered in support of Assembly Bill 47, a bill to create a state tax exemption for individuals contributing to health savings accounts. This bill is nearly identical to AB 4, a bill that FJI supported last session.

Health savings accounts are federally tax-exempt accounts used to pay for medical expenses for employees covered under qualifying high deductible health plans. Each year, an individual and his or her employer can contribute up to the deductible of the health plan. Both the contributions and the account earnings are not subject to federal taxation, and employer contributions to an employee’s HSA are not considered taxable income. This legislation, which was vetoed by Governor Doyle last year, would create an individual income tax exemption for contributions to and earnings on health savings accounts, mirroring federal law.

FJI supports the use of HSAs, which encourage individuals to become more active, engaged health care consumers by giving them a strong financial stake in their health care decisions.

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FORWARD JANESVILLE OPPOSES STATEWIDE SMOKING BAN

January 26, 2007 | On January 24, Governor Jim Doyle announced a plan to attack smoking in the state of Wisconsin. Doyle’s plan calls for raising the cigarette tax by $1.25 per pack, dedicating more revenue to anti-smoking programs, and banning smoking in all public places. Forward Janesville, Inc. (FJI), a nearly 600 Member economic development organization, announced its opposition to Doyle’s proposed smoking ban today.

While all the details of Governor Doyle’s plan have yet to be released, FJI fears his proposal will eliminate existing smoking ordinances in many Wisconsin communities, including Janesville. Janesville’s ordinance prohibits smoking in restaurants that earn more than half of their revenue in food sales, but exempts bowling alleys and allows restaurants to create separate smoking rooms with ventilation systems.

Forward Janesville has vigorously opposed statewide efforts to ban smoking. Last year, FJI actively opposed the Smoke Free Dining Act, a bill to set a statewide standard for smoking in bars and restaurants. “While we clearly recognize the health benefits of smoke-free public places, a statewide ban will hurt Janesville businesses who have already taken the time and trouble of modifying their operations to comply with our local smoking ordinance,” said Steve Werner, the Chairman of FJI’s Government Relations Council.

“We believe that issues like these are best handled at the local level,” said John Beckord, the President of Forward Janesville. “Local governments are best equipped to deal with community standards and can be held most directly accountable for the results.”

“What’s good for Janesville may not be good for Beloit or Evansville,” continued Werner. “We urge our legislators to oppose this one-size-fits-all approach.”