2009 Legislative Issues
Economic Development
Transportation
Workforce and Education
Economic Development
1. Consolidation of Tax Credit Programs:
Issue: Commerce administers 4-5 state tax credit programs, including the Technology Zone program that is of interest to the St. Croix-Chippewa Valley regions. Last year, legislation was introduced to consolidate the tax credit programs. The tax credits awarded to expanding businesses would remain “performance based” (i.e. job creation, capital investment, training, and/or corporate HQ-type projects). Legislators are promoting the proposed consolidation as part of the Legislative Audit Bureau report from a couple of years ago.
Request: United St. Croix Valley requests the consolidation of the state’s tax credit programs.
2. Expand Act 255 Legislation
(Tax Credits to Angel Investors that Provide Equity Investments in High-tech Companies):
Issue: Act 255 encourages Angel Investors (high net worth individuals) and venture capitalists to invest in Wisconsin’s early stage, high-tech companies. Angel Investors, angel investment networks and venture capital seed funds may qualify for Wisconsin tax credits by investing in companies that are designated as qualified new business ventures.
Governor Doyle’s new initiative to grow early-stage businesses in the state is called Accelerate Wisconsin. It is designed to provide new funding and tax exemptions to support investment in high-tech businesses. Accelerate Wisconsin builds on the success of Act 255. Accelerate Wisconsin includes three initiatives: (1) Allow the Angel Investor to claim the entire 25 percent angel credit in the first taxable year; (2) Increase the per-business cap on Angel Investments from $1 million to $4 million; and (3) Delete the Angel Investment cap in a business (which is currently $2 million).
Request: United St. Croix Valley requests the expansion of Act 255.
3. Health Savings Accounts (HSAs):
Issue: Health savings accounts (HSAs) are tax-exempt accounts used to pay for defined medical expenses for employees who are covered under certain high deductible health plans. HSAs afford employees a strong financial stake in their health care purchasing decisions, giving them incentives to aggressively manage their health care costs by becoming more active, engaged consumers of health care.
The United States Congress provided a federal tax exemption to HSA contributions and earnings. A state tax exemption in Wisconsin has not been established. Wisconsin is one of a dwindling number of states which subjects HSAs to state income tax.
Request: United St. Croix Valley requests a state tax exemption for health savings accounts to mirror federal law. The proposed exemption would allow a Wisconsin employee to deduct contributions to a health savings account from his/her state taxes.
Transportation
1. West Central Freeway System
(I-94 from Hudson to Eau Claire):
Issue: Interstate 94 from Hudson to Eau Claire carries an ever-growing number of vehicles. Rapid population growth has led to increased pressures on this vital corridor. Interstate 94 is faced with significant upgrades in the years ahead.
A few years ago, WisDOT designated I-94 between Hudson and Eau Claire as the West Central Freeway (WCF) System. This segment of the interstate was constructed about 50 years ago, and the pavement and bridges are nearing the end of their useful lives.
Traffic statistics for the WCF System are impressive:
- Near Hudson (at the Wisconsin-Minnesota border) an estimated 70,000 vehicles per day use I-94 – the highest Interstate traffic volumes outside of southeast Wisconsin;
- Near Roberts, 40,000 vehicles per day use I-94 – about the same number that use I-94 in Dane County between Madison and Milwaukee; and
- Near Menomonie and Eau Claire, about 30,000 vehicles per day use I-94.
Portions of the WCF System already meet engineering standards to warrant proposed upgrades.
The entire segment of the WCF System will need to be completely replaced in the next 5 to 10 years. Current transportation budgets are not able to fund upgrades to the WCF System.
Request: United St. Croix Valley requests long-term funding solutions for the West Central Freeway System.
2. St. Croix River Crossing:
Issue: A new river crossing between St. Joseph (St. Croix County) Wisconsin and Stillwater-Oak Park Heights, Minnesota was first proposed in the 1970s. It is designed to replace an aging Lift Bridge that currently spans the St. Croix River, a federally-protected resource under the Wild and Scenic Rivers Act.
In 2002, a federal Executive Order created the Environmental Streamlining process. It requires top-level federal, state and local officials to complete difficult environmental and regulatory permitting reviews as quickly and thoroughly as possible.
The St. Croix River Crossing project was one of seven projects from across the U.S. included in the first round of Environmental Streamlining reviews.
In November 2006, after a 3-year, facilitated stakeholder process, the U.S. Department of Transportation issued a Record of Decision on the River Crossing project. The Record is a critical document that leads to funding from state transportation agencies and Federal Highway Administration.
Minnesota’s 2008 Transportation Bill provides new funding to replace all Tier 1 & 2 (rated below a score of “50”) bridges in the state. The aging Lift Bridge once had a rating of 2.8, but a more recent rating is below 32.8. Minnesota’s Bill moves up possible construction on the River Crossing to 2013 (versus 2024 in the Record of Decision). The cost of the River Crossing is estimated at over $550 million, and will require substantial state and federal funding.
Is WisDOT able to fund its portion of the project under the revised timetable?
Request: United St. Croix Valley requests long-term funding solutions for the St. Croix River Crossing project.
3. U.S. Highway 8 Upgrades:
Issue: Improvements to U.S. Highway 8 involve various upgrades from State Highway 35 in Polk County to U.S. 53 in Barron (about 40 miles). This segment of U.S. 8 is classified as a Corridors 2020 connector route in Wisconsin’s State Highway Plan. The Environmental Impact Statement (EIS) for U.S. 8 was approved by the Federal Highway Administration in October 2007.
The need for improvements on U.S. 8 was based on capacity deficiencies, safety concerns, and roadway deficiencies. The Preferred Alternative is a 4-lane corridor. It could take decades to complete the entire corridor.
Due to the lack of transportation funding, U.S. 8 is not considered an Enumerated Project. Meanwhile, growth along the U.S. corridor continues and capacity deficiencies, safety concerns, and roadway deficiencies all intensify.
Request: United St. Croix Valley requests long-term funding solutions for the U.S. Highway 8 upgrades.
Workforce and Education
1. Next Generation Workforce
(Funding the Wisconsin Technical College
System’s Budget Request):
Issue: The Wisconsin Technical College System (WTCS) plays an important role in developing a highly-skilled and well-trained workforce. Leveraging the state’s educational resources helps grow Wisconsin’s economy by producing good-paying jobs.
Locally, Chippewa Valley Technical College (CVTC) and Wisconsin Indianhead Technical College (WITC) are two of the 16 colleges that provide hands-on, lifelong learning options to a diverse set of students.
The WTCS budget request is called Next Generation Workforce and it is aimed at training and educating the workforce needed in today’s economy. The Next Generation Workforce strategically targets new state investments for each local technical college. CVTC has developed manufacturing and energy initiatives that will address critical skill shortages. WITC, through its Northwest Growth Initiative, will train or graduate additional students in the areas of health care and manufacturing.
Request: United St. Croix Valley requests funding of the Next Generation Workforce budget request from the Wisconsin Technical College System. A targeted investment helps ensure employers have skilled workers in vital and emerging sectors like manufacturing, energy, and health care. The proposed short-term investment in the Next Generation Workforce initiative is estimated at $26.7 million.
2. Sustainable Capital Projects
(Technical College Capital Building and
Remodeling Projects):
Issue: Sustainable (or ‘Green’) building practices are important themes for public facilities. Green projects result in long-term savings of energy costs and consumption, but may increase initial building or remodeling costs.
In most cases, Wisconsin state law requires that technical college district boards seek voter approval through referendum on capital project expenditures greater than $1 million (Source: Section 38.15, Wisc. Stats.).
Inflation and sustainable building practices have eroded the purchasing power on construction projects.
Without increased spending authority, technical college districts will be less able to incorporate sustainable construction practices into capital building and remodeling projects.
Request: United St. Croix Valley requests increased expenditure authority that allows technical college district boards to carry out capital building and remodeling projects of up to $1,500,000 without requiring a public referendum. The current limit for such projects of $1 million was last increased in 2001.
3. Improving the State of Wisconsin Capital Process:
Issue: The UW System plays a major role in the state’s short- and long-term economic viability and quality of life. To provide greater efficiency in the higher education system, UW facilities need to be renovated and built at a faster pace than the state’s current process. The method of managing construction projects needs to adapt to modern business models that are geared toward controlling costs and saving time. This initiative saves money and meets the needs of students, faculty and staff.
The Division of State Facilities (DSF) within the Department of Administration (DOA) is responsible for managing the state’s real estate portfolio and providing facilities for all state programs through capital projects and leased space. Many capital building projects remain “In Review” for up to two years prior to construction and inflation reduces the value of the approved budget. Additionally, key components of project development are separated from one another in the state process – the architectural/engineering team (A/E) is separate from the general contractor, and the general contractor is separate from the core sub-contractors. The time “In Process” prior to A/E working under a contract is also an issue, as the procedure for selecting project consultants is time consuming and adds significant delays.
Recommended Actions include:
Shorten the delays in the project approval process in two (2) key ways:
(1) Increase the statutory thresholds that trigger various levels of approval; and
(2) Encourage agencies to control costs by managing the total amount of capital funds expended, rather than by budget controls on each project.
Reform the project delivery method to ensure coordination between the designers and contractors, and provide monetary incentives to complete work in advance of project deadlines. The current capital building program lacks sufficient incentives to control costs and deliver the most value for the money spent.
Streamline A/E request documents and require agencies to submit requests for A/E services to DSF within prescribed schedules. The agency that is proposing a capital project should have a majority vote on DSF’s selection committee, especially when a project is 100% agency funded.
Recent Developments:
In late January, the Division of State Facilities forwarded recommendations for improving the capital building process to the State of Wisconsin Building Commission. The recommendations, if approved by the Building Commission, may result in a legislative proposal or a budget initiative.
Request: United St. Croix Valley requests reforms to the system that governs the capital building process in Wisconsin.
|
