Below is an excerpt from the most recent edition of WisBusiness Tuesday Trends.
The full version of this weekly look at the state of Wisconsin business is available for free to anyone who signs up for the Tuesday Trends mailing list.
The full product includes several items in each of the rising, mixed and falling categories plus a look at upcoming business events across the state.
To get the full version of Tuesday Trends in your inbox every week, sign up now for the free mailing list. (If the preceding link does not work for you, simply send an e-mail to trends@wisbusiness.com with “Subscribe to trends” in the subject line.)
WisBusiness also publishes a summary of state business news sent to paid subscribers every weekday.
Sign up for a free two-week trial of WisBusiness subscriber products.
RISING
Economic development: Gov. Scott Walker signals he’ll make the state’s workforce a primary focus of his budget proposal later this month, floating a pair of spending initiatives ahead of next week’s address to lawmakers. First, Walker tells attendees at the Governor’s Economic Development Conference in Madison that his budget will include millions for state marketing, another large investment in tax credits and seed money for start-up companies. He also hints at a possible venture capital provision. Then, over the weekend, Walker’s office announces a $132 million effort to improve skills of the state’s workforce across a series of agencies both through his upcoming budget and separate legislation. The legislation — which will be targeted for passage ahead of the budget bill — would establish a new system to track job vacancies, include $15 million in worker training grants and create an Office of Skills Development within the Department of Workforce Development. The budget proposal, meanwhile, is set to include aid for DWD, as well as technical colleges, the university system and K-12 schools.
MIXED
Sales tax changes: The idea of raising the state’s sales tax in order to drive down a different tax is nothing new. It is, however, out of the ordinary to see a top Walker administration official talk openly about bringing the tax from the current 5 percent up to 13 percent to eliminate the income tax altogether. In response to a question before the Wisconsin Counties Association, Administration Secretary Mike Huebsch lays out just how big a sales tax hike would need to be to wipe out the income tax, adding that lifting some exemptions could drop the level below 13 percent. Moreover, Huebsch tells the crowd such a conversation is coming. The governor walks back the comments the next day, saying it won’t happen in his next budget but would be an interesting conversation down the road — particularly after other states, such as Louisiana under Gov. Bobby Jindal, explore similar options. Assembly Speaker Robin Vos emphatically adds that such a move is off the table; Democrats, meanwhile, slam the idea as regressive and unfair to the middle class and the poor.
FALLING
UW System: Already in hot water with state lawmakers over $33 million in excessive health care and pension payments, the UW System acknowledges another $1.1 million was lost through even more overpayments. The system has been trying to fix problems with human resources software unveiled in early 2011, and officials tell the UW Board of Regents the additional losses included $700,000 due to changes in the enrollments of full-time students, who are exempt from FICA withholding. Another $350,000 was attributed to benefit costs improperly billed to employees. While telling the regents other issues — such as overpayments for life insurance — have been found and resolved, UW officials note it’s still possible there will be additional problems that come to light before all the kinks are worked out. The problem comes at an inopportune time for the system. State budget watchers say they expect the technical colleges to fare OK in the governor’s budget proposal, thanks to his focus on workforce training. But while Walker has found common ground with the UW on some issues — including a new flexible degree program and linking state aid to better workforce training — some ask how UW supporters can ask for more funding if they can’t track what they already have.
