Dear WH&LA Lodging Member:
We keep waiting for some of the key legislative proposals impacting our industry to settle at least in part before summarizing them to you, but we have come to realize that many will continue to be a work in progress this session, so please keep in mind that our updates are current as of now.
First, if you want to get the full story on the top issues, please plan now to attend WH&LA's Action Day on Wednesday, April 5 starting at the Sheraton in Madison at 10:00 am and ending at the state Capitol! In addition to our issue updates and luncheon, we have State Representative Jill Billings (D-LaCrosse), a member not only on the Assembly Committee on Tourism but also the Governor's Council on Tourism coming to address the group and we will be announcing another legislative speaker in the next week or two. To register online, go to:
http://www.tfaforms.com/230572
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September 1 School Start Date
Representatives Ott, Kooyenga, Neylon, Felzkowski, Brandtjen, Skowronski, Rodriguez, Duchow, Riemer, Vruwink, Bernier, Nerison, Sinicki, Crowley, Petryk, Hutton, Bowen, Allen, Considine, Pope, Hebl, VanderMeer, Spreitzer and Zepnick;
cosponsored by Senators Darling, Kapenga, Hansen, Johnson, L. Taylor, Vinehout, C. Larson, Harsdorf, Nass, Vukmir and Stroebel
AB 103 has 35 total sponsors already, which is double the support from the last time this was proposed back in 2013, and the school boards and administrator organizations are out in full force pushing for passage in their communities of local resolutions supporting the elimination. Many local articles have been posted by the media (many of which have been referenced in our weekly WH&LA Insider emails).
What is the latest?
- WH&LA and our tourism partners in the Tourism Federation have sent letters to all state legislators, and have met with leadership in both houses, along with many other legislators to ask for their opposition for AB 103. Over the next few weeks, the Wisconsin Restaurant Association and the WH&LA will be strategically releasing Op-Ed pieces to the media with key points why this bill should be stopped.
- State Rep. Joel Kitchens (R-Door County) wrote an excellent Op-Ed piece that was already picked up by many publications around the state: http://www.thewheelerreport.com/wheeler_docs/files/0221kitchens.pdf.
- AB 103 was sent to the Assembly Education Committee (Chair: Rep. Jeremy Thiesfeldt), where it is likely there will be a public hearing at some point.
- There is no Senate bill introduced to date, but if Sen. Alberta Darling does introduce the bill there, as anticipated, the Chair of the Senate Education Committee Sen. Luther Olson, has already declared that he strongly opposes this proposal and would not pass it out of his committee. While this is a considerably obstacle, it is possible that such a bill could be assigned to another committee where the chair supports the proposal.
State Tourism Marketing Funding
As reported in brief when the Governor released his state Budget Proposal in early February, the state Tourism Marketing Budget was reduced by $260,000 the first year of the biennium, and by $210,000 the second year. While approximately $500,000 in designated earmarks in the marketing budget expire July 1st, the tourism industry was hopeful that this full amount would remain in the budget so that it could be spent on tourism marketing through the normal prioritization process they utilize. We will continue to push for not only reinstatement of the full funding, but also an increase, due to the 8 to 1 Return on Investment (ROI) to the state.
What is the latest?
The next step in the State Budget process is for the Joint Finance Committee to schedule their normal series of public hearings around the state, and begin their deliberations this month to determine what aspects of the Governor's Budget proposal they will keep and what they will alter, before they send their updated Budget proposal to both houses of the state legislature to debate. Both houses have to reach concurrence and pass the same final version before it can go to the Governor for his final review and opportunity to veto certain passages, if he wishes. Only then does it become law. In the coming weeks we will be suggesting that members contact the Joint Finance Committee to seek increased funding for state tourism marketing - we will provide their email addresses at that point to make sure the tourism voice is heard.
Local Tax Increase Proposals
New this session there are a number of yet-to-be introduced or even finalized, proposal variations that would add the authority for local governments to increase local taxes, such as:
- On lodging, restaurant, and car rental businesses (similar to the Wisconsin Center District taxes), which could go to creating a special exposition district (with potentially much broader definitions of exposition centers).
- Increase the number of areas that could become "Premier Resort Areas" which would impose a half-percent sales tax on 44 Standard Industry Classification (SIC) code retailers that were identified as benefiting from tourism, including of course lodging. The revenue from PRAT must be used on "infrastructure" which would likely be designated for road maintenance
- Increase the local general sales tax on all taxable sales in a city or county. In some cases the interest is to fund roads/transportation purposes, but other purposes are also being discussed.
What all the proposals have in common is to create a new source of revenue for local developments or projects that currently would not have public funding. What will be interesting is whether at some point there will be an effort to mesh all of these proposals, AND how to gain support from the Governor who is not interested in adding new taxes, and who has the power to veto components in the Budget or separate bills passed by both houses in state government.
Elimination of the Personal Property Tax
The WH&LA has joined a coalition of over 40 trade and business associations seeking to repeal Wisconsin's Personal Property Tax through a phase-out plan that would have the state gradually reimburse local governments for direct losses of revenue, so that the costs would not simply shift to an increase in real property taxes.
Transportation
Following a recent Audit's findings that the Dept. of Transportation made numerous errors in estimating project costs and over-spent in some projects without sufficient oversight, the funding of the considerable transportation needs in our state has become even more complex and controversial. There continue to be many who support adding new sources of revenue, through new or increased fees, and there are some who continue to state that DOT needs to save money through better oversight. Add to this the fact that the Governor has repeatedly strongly opposed tax or fee increases to generate increased funding for transportation unless there are savings elsewhere in the budget for taxpayers.
Late last week it was announced that a partially started study on a proposed expansion of I-94 north of Madison up to Wisconsin Dells was stopped as a means to cut expenditures, which generated a strong outcry from tourism and other businesses hoping to see a completed study demonstrate a strong need that would put such a project in the line up for funding in the near future. Considerable media coverage has likely opened the door to discussion on whether a change is in order, however it is too soon to tell.
The WH&LA has added our voice to those expressing concerns that in addition to some opportunities for savings and more prudent investments, appropriate funding for safe transportation infrastructure is critical to the tourism industry, and yet we have been clear in our opposition to toll roads in our state which could be detrimental to our appeal to the very tourists that state and local marketing investments work so hard to attract.
Room Tax to Economic Development
As mentioned in an earlier WH&LA Capitol Insider, a proposal is being considered for introduction by Rep. Joe Sanfelippo (R-New Berlin) that would enable a municipality to access the entire portion of room tax revenue currently mandated for Tourism Promotion and Tourism Development (TP&TD) for expenditure on what they define as "economic development". While the definition of economic development has evolved from what was proposed last session and effectively stopped, this time it is defined to be "development designed to promote the construction, development, or refurbishment of a new or existing hotel or motel in the municipality". While this language may not be the final version that could be introduced, after consideration and meeting with the bill sponsor to better understand the intent, the WH&LA would not support re-opening access to the tourism portion of room tax revenue to municipalities for their discretionary interpretation - especially after the language was changed last year to remove their control and provide it instead to a tourism commission or a tourism entity only. It would also be problematic for properties collecting room tax to in essence be contributing to the renovation or development of a competitor, which is likely why there is already language in the room tax statute that prohibits a tourism commission from providing room tax revenue to "construct or develop a lodging facility".
There are many more proposals in the works waiting for finalizing before introducing as a stand alone bill or hoping for inclusion by Joint Finance Committee in the Budget. We will try to feature more when then achieve better clarity.
As always, thank-you for your support of the WH&LA!
