Tightest Budget in Years Still Laced with Special Interest Goodies

Donations Yield Breaks for Big Suds, Tourism Holiday, Biz Tax Write-offs and Lotsa Concrete

March 26, 2001

Madison - Special interests who contribute thousands of dollars a year to the governor and legislative leaders are again seeing their investments pay off through millions of dollars in tax breaks, state funded projects and other proposals in the proposed 2001-03 state budget, the Wisconsin Democracy Campaign said today.

The Legislature’s Joint Finance Committee begins public hearings this week on the proposed budget crafted by Gov. Scott McCallum and former Gov. Tommy Thompson. As they consider what has been characterized as one of the tightest state budgets in 30 years, hundreds of lobbyists representing nearly 700 groups, businesses, unions and others will be working the halls of the State Capitol.

The tight budget is being used to justify cuts in programs that serve many, including state recycling grants to cities that help hold down property taxes, and aid to the university system that helps avert large tuition increases. But this budget also contains new spending items and tax breaks that powerful special interests will be using their checkbooks to protect. Here’s a sample:

TRANSPORTATION

The state’s present list of road projects approved by the legislature and scheduled to be built and paid for over the next 10 years will cost at least $1.6 billion.

  • The budget asks approval of three new highway projects that will cost between $292 million and $319 million, despite concerns about affordability expressed earlier by road-building advocates, including former Gov. Tommy Thompson, due to the $550 million to $950 million cost to rebuild the Marquette Interchange in Milwaukee.

The transportation industry has contributed $98,772 to McCallum, $843,911 to Thompson and $875,447 to current legislators in large individual and PAC contributions from 1993 through Dec. 31, 2000.

BUSINESS

Some pricey tax breaks and start-up funding programs for business interests, which began pelting McCallum’s campaign with contributions last year, include:

  • An $80 million a year tax break known as the single sales factor formula.
  • A $16.2 million increase in the property tax exemption for computers, bringing the total cost of the exemption to the state to $158.2 million over two years.
  • The creation of up to 20 new technology development zones that could provide up to $100 million in tax credits to new businesses in addition to 76 development and enterprise zones that have already provided about $120 million in business tax breaks.
  • A $2.5 million a year tax break for Midwest Express and Air Wisconsin, which sharply increased its contributions last year after airline tax break proposals took their first unsuccessful flight through the legislature.

Business interests have contributed $681,267 to McCallum, $6.5 million to Thompson and $5.7 million to current legislators in large individual and PAC contributions from 1993 through Dec. 31, 2000.

BREWERS

  • The budget proposes to relax so-called "tied-house" rules that limit the value of gifts to taverns by brewers. Some claim the tied-house rule changes, which were developed and backed by Miller Brewing, benefit large brewers and threaten smaller, specialty brewers. Current laws restrict to $150 the value of signs and other gifts that beer wholesalers can give to taverns, and restrict to $75 per day the amount of business entertainment a brewer can give a bar. The new rules place no limit on the value of signage, increase the gift limit to $2,500 and expand the business entertainment restriction to $500 per day.

Miller Brewing has contributed $2,325 to McCallum, $41,603 to Thompson and $99,521 to current legislators in large individual and PAC contributions from 1993 through Dec. 31, 2000.

TOURISM

This $10 billion a year industry scored a partial victory in the 1999-2001 budget by finally getting a law on the books requiring public schools to begin after the Labor Day holiday unless their school boards opted out. A lot have.

  • Now comes a provision in McCallum’s budget that discourages schools from starting classes before the Labor Day weekend by prohibiting them from holding classes on the Friday of Labor Day weekend.

The industry, which claims it loses about $66 million a year due to pre-Labor Day school starts, contributed $52,659 to McCallum, $526,430 to Thompson and $580,368 to current legislators in large individual and PAC contributions from 1993 through Dec. 31, 2000.

Earlier this year the WDC issued a report, "Playing the Policy Market," that showed special interests realized an average 33,000% return on investment for the campaign contributions they made to influence public policy decisions in the 1999-2000 legislative session.