Dear WH&LA Lodging Member:
The state legislature is operating at full throttle of late, which will definitely continue throughout this month - between introducing new bills, having public hearings on already introduced bills, and having Joint Finance Committee work through their budget proposal to submit to both houses, there is never a dull moment and plenty of pros and cons to go around. The following are just a few of the issues that WH&LA has been engaged in on your behalf recently.
STATE TOURISM MARKETING BUDGET
While state Rep. Joan Ballweg had drafted a formal motion request for Joint Finance Committee asking them to add $3 million in additional funding over the two year budget cycle specifically for out-of-state marketing, Wednesday evening when Joint Finance Committee did not introduce the motion and closed the Tourism component after considering other motions instead, this effectively stopped it. While there remains one long-shot opportunity through another door in the budget, this door is closed for now. We wish to thank Rep. Ballweg for her extensive work to pursue this motion on behalf of the tourism industry.
What did pass in Joint Finance in last-minute separate motions under the Tourism Budget:
- An additional $75,000 on a one-time basis for improving structures and property in Vernon County used to facilitate a national or international ski jumping competition, with a local 33% match required and a two year use deadline.
- An additional $7,500 on a one-time basis for a grant to the City of Pittsville in Wood County to provide signage and a landmark noting it is the geographic center of Wisconsin.
- An earmark of $59,500 in one-time funding from the Tourism budget to match federal grant awards received from the National Endowment for the Arts. Without this addition, the matched amount from NEA would not be received in our state.
All components of the Budget proposal approved by Joint Finance do still need approval by both houses of the state legislature plus would be subject to line veto authority provided to the Governor before the final budget becomes law - possibly in July.
EMPLOYMENT OF MINORS
SB11 and AB25 each passed their respective committees and houses and are awaiting the Governor to sign them into law. These bills remove the requirement that 16 and 17 year old minors must have a work permit, frequently reimbursed for by their employer. The intent was to remove barriers for teens unable to have a parent or guardian available to sign the authorization, enabling more minors to legally earn wages.
ELIMINATION OF SEPTEMBER 1 SCHOOL START DATE
The bills introduced in both houses in late February/early March proposing to eliminate the school start date for K-12 public schools, but strong vocal support by school boards and school district administrators, appears stopped following very clear remarks Governor Walker made publicly at a school event a few weeks ago stating that the elimination of the school start date will not happen this session, meaning that even if they passed committees and the houses, that his intent would be to veto it. While some have found a minimal impact with the start date, the majority of our members have said that retaining the school start date is important to tourism and their property in their area, meaning this is very good news!
HISTORIC BARN RENTALS
SB 137/AB187 introduced in late March proposed an exemption from certain building code requirements for historic barns built before 1965 that are used for event rentals. Requirements such as electrical and elevator code compliance, no smoking, limited seasonality, and the authority of the DSPS to inspect and require safety elements remained intact. A public hearing was held yesterday with a number of additional safety features that should be added brought forward along with a few added eligibility conditions requested by the WH&LA (such as the structure had to have been on A-1 Agriculture zoned land for at least 35 years, etc) to ensure only truly historic agricultural barns and not purely commercial structures could not by-pass codes while our event spaces must follow them. The bill sponsors have agreed to WH&LA's requests and will likely make some added modifications in an amendment before asking for approval by the Committee.
LIABILITY FOR UNDERAGE DRINKING
SB 202/AB 275 was intended to remove a current loophole for adults hosting underage drinking parties in their homes, but WH&LA discovered that the language could have extended to new liability for lodging properties. At our request, the bill sponsor agreed to draft an amendment that we found removed the potential new liability for lodging properties and in fact will extend it to adults renting rooms for underage drinking. The amendment was introduced last week and approved by the Assembly Committee on State Affairs, sending it to the full Assembly next, while the Senate companion bill is still awaiting an initial hearing.
ELIMINATION OF PERSONAL PROPERTY TAX
The ability of municipalities to tax the personal property of businesses each year after they already paid sales tax when the items were purchased is an unfair tax burden that is no longer allowed in other midwestern states. The challenge is if this is eliminated, what happens to the lost revenue to municipalities, and will businesses just be paying through another door? SB 218/AB 277 proposed to eliminate the personal property tax starting in 2018, with the state needing to subsidize the lost revenue (estimated at $261 million). The WH&LA is part of a coalition of over 40 business organizations lending our support of this bill in committee hearings in both houses over the last 10 days. It is uncertain whether a funding solution will be found or whether a modification phasing it out in some manner will be possible.
ELIMINATION OF HIGHER LODGING PER DIEM RATES FOR UW SYSTEM EMPLOYEE TRAVEL
The current authority of the UW System enables their employees traveling for work to pay up to the Federal Lodging Per Diem Rates, which are currently higher than the State Lodging Per Diem Rates. While a bill was introduced in the Assembly in April to state that UW System employees would have the same cap on rates as state employees, the Joint Finance Committee decided to take this up under the Omnibus motion on the UW-System Budget last week, which states:
" Prohibit the Board of Regents from providing for reimbursement of System employees for lodging expenses in Wisconsin at a rate that exceeds the maximum rate for such expenses incurred in the same location in Wisconsin under the approved uniform travel schedule incorporated into the current compensation plan. Specify that this prohibition would first apply to claims for reimbursement on the first day of the fourth month beginning after publication of the budget act. Contracts that are in effect on that day would be exempt from this provision"
COUNTY/MUNICIPALITY WHEEL TAX REQUIREMENTS
There are currently 16 municipalities and 5 counties that impose a local wheel tax on the registrations of vehicles located in the county or municipality. This bill adds a new requirement that in order to impose a wheel tax, a binding referendum must occur during a regularly scheduled election, with a majority of the votes made in approval. For counties or municipalities already having a wheel tax, in order to continue this tax they must hold a binding Referendum within 18 months of passage of this bill, with a majority of votes in favor.
"DARK STORES" PROPERTY TAX ASSESSMENTS
Two versions of this proposal pursued by the League of Municipalities are being circulated for co-sponsors. This would provide additional authority for property tax assessments to be based on the full potential value and to include assets that are not normally taxed separate but are somehow intertwined. A growing group of businesses, led by WMC, MMAC, Independent Businesses and separate businesses are strongly opposed due to the potential measurable expansion of assessment values. Recently the city of Madison has re-assessed lodging properties in their area with some doubling and even tripling their previous assessed value. The WH&LA has joined the coalition in opposition to this bill which provides more flexibility to assessors to establish increased values which can increase property taxes for all or even certain industry businesses.
This is just a brief summary of a few of the issues we are working on, and we will continue to do our best to provide updates as the flurry of action continues at the state Capitol.
Best,
Trisha
Trisha A. Pugal, CAE
President, CEO
Wisconsin Hotel & Lodging Association
