2008 Legislative Issues
 Consolidation of State Tax Credits:
Issue: In August 2006, the Legislative Audit Bureau (LAB) issued a comprehensive analysis of the state’s economic development programs. In the 2003-2005 biennium, state spending on economic development was estimated at $152.8 million. Program spending included funding for (1) grants and loans; (2) direct program services and administrative costs; (3) bonding authorization; (4) loan guarantees; and (5) tax credits claimed by businesses.
LAB also identified 152 economic development programs in the state. The Department of Commerce is statutorily designated as Wisconsin’s lead economic development agency. Seven other state agencies also administer economic development programs, including the Department of Agriculture, Trade and Consumer Protection (DATCP); Department of Natural Resources (DNR); Department of Tourism; Department of Transportation (DOT); Wisconsin Housing and Economic Development Authority (WHEDA); and Wisconsin Technical College System (WTCS).
Tax policies are an important component of the state’s economic development efforts. Since 1988 businesses located in designated Development Zones have been eligible for income tax credits. Businesses can earn tax credits through five zones - Community Development, Development Opportunity, Enterprise Development, Technology, and Agriculture Development. Every part of the state is included in at least one type of Development Zone.
Policymakers have raised questions about the scope of Wisconsin’s economic development programs. The large number of programs identified by the LAB raises concerns about the potential duplication of program services. Solutions for many programs, including Development Zones and tax credits, have been sought.
Request: United St. Croix Valley requests legislation that consolidates the
income tax credits from the five Development Zones into a single category and expands eligible activities to include job creation, capital investment, and employee training.
 State Tax Exemption - Health Savings Accounts:
Issue: Health insurance costs are a major concern for Wisconsin businesses. Together, residents and businesses seek solutions to reduce the cost of health
insurance. The inability to proactively find solutions means a further decline of
employer-sponsored coverage.
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. They became available on January 1, 2004 and are a popular choice across the U.S., including Wisconsin. 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 heath care.
Health savings accounts are employee-owned and may be carried over – from year-to-year and from employer-to-employer. Withdrawals from health savings accounts are not subject to taxation if used to pay for qualifying medical expenses.
The U.S. 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. Continuing to tax these accounts only hurts the Wisconsin employees possessing them.
Wisconsin employers understand that attracting and retaining good employees mean they need to offer good healthcare benefits, or explore alternatives to
traditional benefits.
Minnesota, Iowa, Michigan, and Illinois (Wisconsin’s border states) allow a state
tax exemption to HSA contributions and earnings. The lack of an exemption in
Wisconsin puts border counties like Polk, St. Croix, and Pierce at a disadvantage
to Minnesota companies that are candidates for expansion and relocation.
Request: United St. Croix Valley requests a state tax exemption for health
savings accounts to mirror federal law.
Transportation:
(1) West Central Freeway, U.S. Highway 8, and Transportation Feeder Systems:
 Issue: Interstate 94 from udson 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.
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.
Like the WCF System, U.S. Highway 8 represents a
vital corridor. U.S. 8 bisects Polk County and is a 2-lane
rural roadway. It faces significant upgrades. A 46 mile
segment of U.S. 8 in Polk and Barron counties was
examined by WisDOT for improvements. Both
WisDOT and the Federal Highway Administration
approved Highway 8’s Environmental Impact
Statement. The project currently awaits funding.
While I-94 serves as the backbone of the WCF
System, Highways 35, 65, 128, 53, 63 and 10
are major feeder routes. Upgrades to these
highways are imminent.
Request: United St. Croix Valley supports
long-term funding solutions for the West
Central Freeway System, U.S. Highway 8, and
major feeder routes like Highways 35, 65, 128, 25, 53
and 10 to ensure that upgrades occur in a timely manner.
 (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.
Nearly 30 Stakeholders engaged in a 3-year, facilitated process to examine alternatives and bring forth a recommendation on a new river crossing. The Stakeholder’s work culminated in November 2006 with a Record of Decision from the U.S. Department of Transportation. The Record is a critical document that leads to funding from state transportation agencies and Federal Highway Administration.
The Record suggests that funding delays may postpone the start of construction on the river crossing to the year 2024. Stakeholders widely view this delay as unacceptable.
The facilitated Stakeholder Process was also designed to avoid litigation. In June 2007, the Sierra Club filed a lawsuit in U.S. District Court in an effort to stop the river crossing project, saying the project violates federal laws and policies that protect the St. Croix River. Of note, the Sierra Club was included as a Stakeholder in the Environmental Streamlining review.
Request: United St. Croix Valley supports long-term funding solutions for the St. Croix River Crossing project.
 Media Access:
Issue: The St. Croix Valley exists in a media void. Access to daily news from Wisconsin is a challenge for residents and businesses in the St. Croix Valley. The void exists for print, broadcast, and cable.
Disputes between cable companies and sports network channels mean premium channels like the NFL Network and Big 10 Network are not available to a large number of subscribers throughout the state, including Polk, St. Croix, and Pierce counties.
The cable companies and networks disagree on how the channels should be presented to subscribers. Cable companies want to offer the network packages on their sports tier at an additional charge to consumers, while the sports networks want their product carried on the cable companies’ basic tier. This would make their programming available to a broader audience at little or no additional charge to consumers.
Assembly Bill 604 and Senate Bill 343, also known as the Fair Access to Networks (FAN) legislation, will establish a dispute resolution process to resolve the programming differences of cable companies and programming networks. A process involving independent arbitration establishes a fair way to end disputes so that consumers may enjoy better access to programs they desire.
Request: United St. Croix Valley supports Assembly Bill 604 and Senate Bill 343 (Fair Access to Networks legislation) as a way to improve the media void in the St. Croix Valley.
 Research and Scientific Park:
Issue: The St. Croix Valley is rich with talent and technology.
Institutions like UW-River Falls, Wisconsin Indianhead Technical College (WITC), and Chippewa Valley Technical College (CVTC) are major drivers of economic development and innovation.
Polk, St. Croix, and Pierce counties are part of the I-94 Corridor Technology Zone. This zone is one of the most active of the state’s eight Technology Zones relative to high-tech companies earning state tax credits. The $5 million pool of tax credits is nearly exhausted.
Polk, St. Croix, and Pierce counties are uniquely positioned along the Wisconsin-Minnesota border. Two of the three counties (St. Croix and Pierce) are included in the 13-county Minneapolis-St. Paul MN-WI Core Based Statistical Area (CBSA). The Twin Cities metro area is significant driver of talent, technology, and scientific innovation. The 13-county region consistently ranks near the top in studies of desired locations to live, work, and operate a business.
Retaining, expanding, and recruiting high-tech companies are important components of economic development strategies for Polk, St. Croix, and Pierce County EDCs. Jobs created by high-tech companies are highly compensated which raises the standard of living for the region and state.
Successful economic development is a public-private partnership. Both parties bring effective resources that result in expanding the tax base of towns, villages, cities, and regions. The NanoRite Innovation Center in Eau Claire is an excellent example of a public-private partnership. NanoRite will have a profound impact on nanotechnology in the Chippewa Valley for decades.
Public-private interests have aligned in the St. Croix Valley and a regional research-scientific park is desired.
Request: United St. Croix Valley requests a long-term funding component from the State of Wisconsin to assist with the creation of a public-private research-scientific park. This could include a Community Development Block Grant (CDBG) from the Department of Commerce and/or workforce development funds from the Department of Workforce Development.
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