RECENT BARCA AND LEGISLATIVE SUCCESSES

Jobs are Job #1

Peter Barca's top priority is to get our economy back on track and work with businesses to create jobs. Barca was appointed to chair the Partnership for a Stronger Economy, a work group that is primarily comprised of business owners, economic development experts, leaders in workforce development and higher education, and labor representatives. The group has traveled the state on a mission to identify, develop, and promote innovative approaches to economic development and job creation. The Partnership is dedicated to finding ways to make it easier to do business in Wisconsin by identifying obstacles that hinder growth.

The Partnership led the way to helping to pass over 50 economic development initiatives this session. Click here for the memo authored by the non-partisan Legislative Council which identifies these proposals

Job Creation and Economic Development Legislation

Representative Barca helped pass a number of key provisions this session to strengthen Wisconsin's economy. These include an expansion of the Enterprise Zone Program that added a 10% refundable credit (Act 28) for companies making significant capital expenditures in an enterprise zone. The legislature also consolidated and expanded the $94 million Enterprise Zone (EZ) Tax Credit (Act 11, Act 28, Act 266). The EZ Tax Credit program is among the state's strongest tools in terms of encouraging companies to locate and stay in our state. This credit can be earned through the creation of new full-time positions, capital investment in property or equipment, and re-locating a corporate headquarters to Wisconsin.

The EZ Tax Credit was further supported by creating a Wisconsin supplier credit program entitled the Small Business Reinvestment Act (Act 276), which offers additional incentives for large manufacturers to invest in Wisconsin suppliers.

Some of the companies that have taken advantage of the EZ Tax Credit:

Uline packaging supplier: will create a 1,000 jobs in Kenosha County

Republic Airways: retained 800 jobs, created 800 jobs

Mercury Marine: retained 1,900 jobs, created 800 jobs

Oshkosh Truck: created 2,000 jobs

Morgan Aircraft: will create up to 1,000 jobs

Another job creation program that was noted among business-owners and development groups was the Jobs Tax Credit (Act 28). This credit is targeted at significant job creation at small and medium sized businesses. The program will provide up to $10 million per year in payroll credits to businesses. A portion of the wages paid and training on new, family-supporting jobs would be eligible for up to a 10% credit. Worker training costs are also be eligible for the credit.

A significant concern of a number of small businesses was that as credit markets tightened it became difficult to obtain the funding they needed to fill orders, buy equipment, and grow. Peter Barca authored and passed the Small Business Capital Access Program (Act 268) based on similar proven programs which have been successful in Milwaukee and other states. Capital Access encourages financial institutions to offer loans to small and medium-sized businesses that are just outside of conventional underwriting standards by establishing a loan loss reserve fund. The lender and the borrower pay a small percentage of the loan amount up front which is matched by the state and deposited into the reserve fund for the lender to use as additional collateral on the loan. A $350,000 investment by the state is estimated to leverage $13 million in loans for businesses to grow and create jobs.

In the interest of providing businesses a one-stop regulatory shop to assist with regulatory actions and expedite permitting and licensing processes, Peter Barca authored a comprehensive bill for regulatory fairness and part of that initiative was combined with the C.O.R.E. Jobs Act to reorganized resources at the Department of Commerce to create the Office of Regulatory Assistance (Act 265). This office will serve as the liaison between businesses and state agencies, assisting with regulatory compliance, explaining requirements, and tracking permit applications on a company's behalf.

To further encourage innovation and growth at many of the state's top companies; including Mercury Marine, Harley-Davidson, Kimberly Clark, and GE; the legislature passed the Super Research and Development Tax Credit (Act 28). This program provides a dollar-for-dollar credit for qualified research expenses, allowing companies to claim a credits against tax obligations for significantly increasing investments in research and development of new technology.

A thriving economy requires having a workforce that is trained and educated for the jobs that are available. In order to cultivate stronger relationships between new businesses and our state's colleges and universities, Peter Barca authored and passed the Entrepreneurial Assistance grant program (Act 28), a grant program that provides funding for paid internships at newly created businesses. These interns, studying business-related fields, will work under the supervision of a professor and assist with writing a business plan, marketing, engineering, and other activities necessary in growing a new business. Businesses benefit from the assistance at a critical time and students benefit from the experience of building a company from the ground up.

There must always be incentives for investment in new ventures. With one of the first pieces of legislation this session, the legislature expanded the requirements for the Angel and Early Stage Seed Investment Tax Credits (Act 2) to make the program accessible to a broader range of investors and businesses. The credit now allows investors to claim a tax credit of 25% of their investment in the year the investment was made rather than 12.5% over two years. It also removes the $2 million limit on the amount of the investment that qualifies. Under another new law, investors who reinvest gains in Wisconsin start-up businesses can now receive a break of up to $10 million on state taxes of long-term capital gains (Act 28) that are reinvested in qualified start-up business ventures.

Recent federal legislation allowed some local governments to issue several types of tax-exempt bonds for development, however much of it was structured in a way that made using the authority problematic. In response, Representative Barca played a lead role in crafting legislation which allowed the state to consolidate and redirect federal bonding authority (Act 112) in order to better target resources toward projects that maximize job creation. Energy Composites, a wind blade manufacturing company in central Wisconsin, has already been able to benefit from this legislation, as the company will be adding over 600 new good-paying, clean energy jobs following the completion of their new plant.

Promoting the use of clean, renewable energy is an important way for our state to reduce energy costs and become more energy independent. This session, the legislature created the Green to Gold Fund (Act 332) to capitalize on Wisconsin's natural advantages in the renewable energy industry and aligns federal resources with state resources to provide $100 million for businesses to save on energy costs and create green jobs.

Wisconsin has a rich agricultural tradition, and as we pursue growth in other sectors of our economy, it is also important to maintain investments in these essential industries. In order to create partnerships and share resources between new farmers and established farms the Farm Asset Owner Credit (Act 28) provides a refundable income tax credit to established farmers for temporarily leasing assets to a new farm. New farmers can also claim the Beginning Farming Income Tax Credit (Act 28). Early in the session, the legislature also passed the Dairy Facility Investment and Meat Processing Facility Credits (Act 2). These programs provided refundable tax credits to companies and dairy cooperatives to cover part of the costs of modernization and expansion at their facilities so they could hire additional employees and increase productivity.

Testimonials From Business Leaders

“We are also adding jobs; more than 400 of them since last November, bringing us to more than 1,200 Wisconsin employees. We have invested over $2.0 million in construction improvements to our Milwaukee hangar to support our growth. We plan to announce additional new markets and increased daily flights from Milwaukee and out-state Wisconsin in the very near future, and we anticipate hiring another 400 local employees before the end of the year. None of this would have been possible without the Enterprise Zone credits. ... In response to an unprecedented recession, state and local officials acted swiftly to enhance Wisconsin's reputation as a great place to do business, encourage job growth and stimulate business relocation here.”

- Bryan Bedford, chairman, president and CEO of Republic Airways described how his company was able to benefit from the EZ Tax Credit program.

"We have been able to utilize the refundable jobs credit to help attract a number of companies to the area. This includes Ingeteam, a Spanish wind turbine production and clean energy company, which will bring hundreds of jobs to the Menomonee Valley when it locates a plant in Milwaukee."

- Julia Taylor, President of the Greater Milwaukee Committee, as she explained her support for the Job Tax Credit in April.

Responsible Budgeting: State Spending Issues

Leadership starts at the top. Legislators made the tough decisions to cut spending while protecting public safety, education, and other essential government functions. Virtually every major department was cut by 6%. The budget for the legislature itself was cut 6.5%, a larger decrease in funding than other state agencies were asked to make.

The spending cuts in the current budget represent the first time ever that the Legislative Fiscal Bureau can identify a cut in GPR spending over the previous biennium. The chart below prepared by the non-partisan Legislative Fiscal Bureau illustrates this fact and details both GPR (tax dollar) and total spending over the past 4 biennial budgets.

+ Democrats cut GPR spending by 2.6% this biennium. The average increase in GPR spending for the past three budgets had been 6%.

+ Largely due to federal stimulus funds, all state spending did increase. The federal funds Wisconsin benefited from include over $1.5 billion in funding for education and healthcare.

+ The last time the entire legislature was under Republican control (‘05-07), GPR spending increased 10.1%, compared to a 2.6% decrease under Democratic control.

+ In the current budget, Democrats cut $727 million in GPR (taxpayer) spending and cut $3.2 billion in total spending. This represented the largest spending reduction of any Midwest state.

Balanced Budgeting: Targeted Cuts and Taxation

While other states relied on drastic and shortsighted measures to fix the budget crisis, including selling their capitol and prisons to private companies (Arizona), closing state parks (Pennsylvania), and slashing reimbursement rates for services to abused and neglected children (Maryland), the Wisconsin legisalture made responsible decisions to protect priorities while still making substantial, targeted cuts to most state agencies.

+ Legislators and their staff led by example, taking furloughs and cutting our own office budgets by 6%. The sixteen day furlough equals a 3.1% reduction in pay for legislators and their staff.

+ Wisconsin's legislature made across the board cuts of 6% to most state agencies, implemented furloughs and layoffs, and cut the entire legislature's budget by 6.5%

+ Approximately 4,000 state positions have been left vacant to reduce spending. Wisconsin state government runs with 8.2% fewer employees than the national average.

+ There was NO across the board increase of income taxes, which meant there was no increase for 99% of Wisconsinites. (Unless your family makes more than $300,000.)

+ There was NO increase to the payroll tax.

+ There was NO increase to the sales tax.

+ In addition, the legislature provided $110 million in property tax relief by increasing the First Dollar Property Tax Credit.

Tax Rankings

+ As of 2010, the Tax Foundation reports that Wisconsin is ranked 29^th in business taxes, well below the national average. View report – click here.

+ “Wisconsin’s national status as a tax hell is fading … Wisconsin even dropped below the U.S. mark on both taxing and spending … That is a first on taxes going back at least two decades.” (Milwaukee Journal Sentinel, 11/27/09) After years in the top five, Wisconsin dropped to 15^th in recent tax rankings. View article link – click here.

+ “Wisconsin’s tax ranking drops to lowest levels in 49 years.” (BizTimes Daily 4/8/10) A report from the Department of Revenue shows our state's tax ranking has dropped to its lowest level since 1961. When considering all revenue sources, Wisconsin ranks 25th per capita.

View BizTimes article - click here. View DOR tax report - click here.

+ Wisconsin spends comparatively very little on government administration. A recent study from the conservative-leaning Wisconsin Taxpayers' Alliance shows Wisconsin ranks 42nd in government administration spending, with less than 1% of all state funds dedicated to that purpose.

+ CNBC ranked Wisconsin and Nebraska as the two most improved states for economic development.

Working Wisconsin

With the national economic recession, there was also a downturn in Wisconsin that led to increases in unemployment. The legislature took action to ensure that Wisconsinites were able to land on their feet and supported Wisconsin workers by investing in enhanced worker retraining efforts and passing legislation to create jobs and stimulate hiring.

+ We approved more than $200 million in aggressive job creation and retention incentives for businesses. (State budget and Act 2)

+ We passed the American Jobs Act so state government contracted jobs stay in the U.S. (Act 136)

+ We passed the Wisconsin Family Jobs Act, which utilizes federal funds to help businesses create entry-level jobs for unemployed workers. (Act 333)

+ We increased funding to Wisconsin technical colleges, the front line in worker retraining efforts. This was one of the only agencies to receive an increase in funding this session. (Act 28)

+ We extended federal unemployment benefits to allow displaced Wisconsin workers a chance to complete an educational program while they look for a new job and also extended COBRA healthcare benefits. (Act 2)

+ We have also invested $13 million in stimulus funds for construction and rehabilitation of seven airports in Wisconsin, and $4 million in bonding authority for dam safety and repair projects needed after the flooding of 2008 to improve the safety of our citizens and communities.

+ We streamlined wind regulation and used bonding to strengthen Wisconsin’s clean energy economy and create the jobs of tomorrow. (Act 40, Act 112)

As a result of these efforts, our state has begun to see positive results:

+ Regular weekly unemployment claims are down nearly 19% from last year, and initial claims are down 27% from 2009. (Milwaukee Journal-Sentinel Sept. 2, 2010)

+ Wisconsin's jobless rate remains better than the national average. Wisconsin’s seasonally adjusted rate is 7.8%. The seasonally adjusted rate for the rest of the country is 9.5%. (Milwaukee Journal-Sentinel Sept. 2, 2010)

+ According to a 2009 report from the Wisconsin Budget Project, Wisconsin is the ONLY state with more manufacturing jobs than government jobs, and only Indiana was even close. (WCCF WI Budget Project.)

+ Relative to the state population, the size of Wisconsin’s state and local government workforce is 8.2 percent below average, and only 9 other states have fewer state and local jobs as a ratio of the state population. (WCCF WI Budget Project.)

Looking Out for Wisconsin

Democrats passed a number of popular reforms, many that had been blocked by Republicans for years. Some of these successes included:

+ Banned Texting While Driving. Studies have conclusively shown the danger posed by distracted driving, including a July 2009 report released by the Virginia Tech Transportation Institute that found texting while driving makes driving 23 times more dangerous. Representative Barca was the lead author of the state's texting while driving ban in order to make Wisconsin's roads safer for our families.

+ Increased Penalties and Treatment for Drunk Drivers. With strong public support, the legislature finally got tough on drunk drivers, including increasing penalties and requiring ignition interlock devices for repeat offenders, but also implemented measures to put a greater focus on treatment of alcohol-related problems. Representative Barca helped lead the fight for ignition interlock devices.

+ Rid Fraud from Wisconsin Shares. After reports of fraud in Wisconsin Shares, the childcare subsidy program for low-income working adults, Representative Barca led the committee that called for an audit the program and passed several pieces of legislation to implement strict reporting requirements, greater oversight, and stiffer penalties for violating that public's trust. The Department estimates that these reforms saved the state $46 million. Barca led the committee that passed this.

+ Protecting Wisconsin Infrastructure. The legislature has created family-supporting jobs through investments in our state's infrastructure, including approximately $250 million worth of projects to improve our highways, harbors, rivers and railways. August 2010 estimates show that investments in transportation, construction, and other stimulus funded projects have funded 63,000 jobs. Wisconsin was one of the first states to take action on federal stimulus funding provisions in order to put the people of our state to work immediately. 

+ Regulated Payday Lenders. Prior to this legislation there had been effectively no state regulation of payday lenders in this state which allowed for some lenders to use predatory practices to take advantage of customers. The new regulation calls for close state oversight and provides a number of new protections for consumers.

+ Closed Dog-Breeding “Puppy Mills”. After several attempts over the years by concerned citizens, this session Democrats were able to pass a bill to ban dog breeding operations that put profits ahead of animal welfare.