May Legislative Update

Shared Revenue Reform Legislation Hits a Snag 

On May 17, the Wisconsin Assembly met on a floor session to take up Assembly Bill 245, the Republican proposal to reform “shared revenue,” state tax revenue that is divided among local governments to support various programs and services. Shared revenue has been a key issue this budget cycle for legislators, the governor, and many stakeholders and interest groups.

The Assembly rejected two amendments introduced by Democratic legislators and then adopted an amendment from the bill’s author and passed the bill, 56-36. The amendment raises the baseline increase in county and municipal aid from 10 to 15 percent and makes a number of other technical changes. Speaker Robin Vos (R-Rochester) said Assembly Republicans were “done negotiating:” “We feel like the bill that’s coming forward is the result of … good faith negotiations. … We are not going to change the bill substantially.”

Speaker Vos and Senate Majority Leader Devin LeMahieu (R-Oostburg) have been involved in negotiations over shared revenue with Gov. Evers. A key sticking point in negotiations is the process by which Milwaukee would be allowed to temporarily increase the local sales tax in order to fund outstanding pension obligations. AB 245 requires any tax increase to be approved by Milwaukee residents via referendum. Both Gov. Evers and Sen. LeMahieu have indicated that they do not support this provision and would prefer to allow local elected officials to enact the tax increases.

The Senate has not yet considered the bill in committee or on the floor. According to Sen. LeMahieu, the chamber will take the original version of the bill through the committee process and will “continue to work with the governor and maybe the speaker if he’s willing to work with us down the road.” Speaker Vos suggested that his caucus is not interested in changing the Milwaukee sales tax approval provision.

When AB 245 was introduced, Gov. Evers stated he would veto the bill in its initial form. The governor criticized the proposal for not providing enough of a funding increase and for placing some limits on how local governments can spend the additional funding.

Other notable features of the proposal are the creation of a dedicated shared revenue account and adding one-fifth of state sales tax revenue to further increase shared revenue payments. See this article for a complete review of the proposal and some of the responses from state political leaders.

Joint Finance Committee Takes Votes on DNR’s Budget

The Joint Committee on Finance held an executive session May 18 to vote on budget motions related to DNR, the Environmental Improvement Fund (EIF), and the Department of Agriculture, Trade and Consumer Protection. The motions were approved by party-line votes with the committee’s four Democratic members voting against. The committee amended and approved an omnibus motion affecting DNR and the EIF, including the following notable provisions and funding changes:

  • Create a PFAS trust fund to address and prevent PFAS contamination; provide $125 million in initial funding
  • Increase the revenue bonding authorization for the EIF by $46 million
  • Increase Urban Forestry Grants by $175,000 per year
  • Create a new continuing appropriation for well compensation and well abandonment grants
  • Delete or transfer several dozen DNR staff positions, including 36.71 FTE positions that have been vacant for at least 18 months
  • Increase various nonresident hunting, fishing, and camping fees

Pool Rule Finalized; Effective Date September 24

Recall, for the last couple years, WPRA has engaged with the Department of Agriculture, Trade and Consumer Program on the rewrite of ATCP 76 or the “Pool Rule.” DATCP finished their work on the draft rule last spring and submitted the pending rule to the legislature for their review. WPRA supported the rule during the state agency public hearing process.

The rule was submitted to the legislature in January and was reviewed by the applicable legislative standing committees in each house, followed by the Joint Committee on the Review of Administrative Rules (JCRAR). The rule has now passed through the legislative review. It is expected to be published for final promulgation in June and the scheduled effective date for the rule is September 24, 2023. DATCP is planning to do some training on the rule, details can be found here.