The Blueprint: Last Call for Advocacy Day
ALSO: Gov. Evers to Introduce First State Budget • Two Viewpoints on Closing the Dark Store Loophole • From NAHB: Problem Solvers Caucus Seeks Bipartisan Housing Solutions
Last Call for Advocacy Day
One week from today members from across the state will be traveling to Madison for our annual Advocacy Day. If you still have not registered, is not too late! Please click here to sign up to attend this event and lobby members of the state senate and state assembly on issues important to keep the cost of housing down for Wisconsin families.
DEADLINE TO REGISTER IS FRIDAY, MARCH 1 AT 12PM.
We have a full day planned for those in attendance. Our itinerary for the day is:
8:00 AM - 8:30 AM - Check-In & Continental Breakfast
8:30 AM - 9:15 AM - Housing Chairs Roundtable with Rep. John Jagler & Senator Devin LeMahieu
9:20 AM - 10:00 AM - Issue Briefing by WBA Executive Director Brad Boycks
10:15 AM - 11:15 AM – Evers' Administration Priorities Briefing by Dept. of Revenue Secretary Peter Barca
11:15 AM - 12:15 PM - Lunch and Polling Presentation from Professor Charles Franklin, Marquette Law School Poll
12:30 PM - 2:30 PM - Capitol Visits
2:00 PM – 4:00 PM - Cocktail Hour
For parking and additional information on the event, please click here.
Our tentative agenda of items to address during visits with members of the Wisconsin Legislature include:
The construction of new single-family homes in Wisconsin is a big part of our economy
Increasing the cost of housing by $1000 prices 4,081 Wisconsin families out of the housing market
Co-sponsor LRB 0998, legislation to streamline the submission of a one- and two-family building permit
Provisions of the state budget that will be introduced by Governor Evers on 2.28.19
We are once again happy to have the Federal Home Loan Bank of Chicago (FHLB Chicago) sponsoring this year’s event. FHLB Chicago’s generous support of our event helps us keep the per member price down to encourage as many members as possible to join us.
If you are even remotely interested in state government’s impact on the housing and building industries, we encourage you to sign up today to attend.
Gov. Evers to Introduce First State Budget
This Thursday, Governor Evers will be speaking to members of the Wisconsin Legislature to formally introduce his first two-year state budget since being elected in November 2018. Over the past few weeks, details of items that are likely to be included in his budget have been slowly released.
So far, information on a wide spectrum of topics have been announced, including:
· increasing the minimum wage
· increasing road funding to municipalities
· completion of “mega transportation projects” in southeastern Wisconsin
· refilling some scientist positions at the DNR
· $1.4 billion of education funding
· $28 million for a women and infant health initiative
· medical marijuana and decriminalizing adult use of recreational marijuana
· increasing the number of prison guards
· continuation of a tuition freeze for students attending UW System schools
· closing the “Dark Store Loophole” and,
· middle class tax cuts funded by limiting the current manufacturing and agriculture tax credit.
Once Evers’ budget is formally introduced on Thursday, we will be taking a deep dive into the plan to determine any positive or negative public policy items relating specifically to housing. Having members be able to discuss provisions of the state budget the following Tuesday at Advocacy Day will be a big positive to either stop or support provisions that effect housing.
Two Viewpoints: Closing the “Dark Store Loophole”
During the February 8 meeting of the Advocacy Group, one topic that was discussed was the issue of closing the “Dark Store Loophole” and whether this is an issue that WBA should support this legislative session. This exact topic was discussed during our meeting to start the last 2017/18 session. Ultimately the decision was made to monitor the issue, but WBA never formally took a position on the topic last session.
For the time being, WBA will continue to monitor the progress of the legislation to address the “Dark Store Loophole”. We wanted to take this opportunity to provide you insight on the issue from one side supporting the legislation and another who is actively lobbying against the proposed change.
The first article is in support of legislation to close “Dark Store Loophole” and is authored by the League of Wisconsin Municipalities Executive Director Jerry Deschane, followed by a piece against any legislative changes on the topic, authored by Cory Fish, Director of Tax, Transportation, and Legal Affairs for the Wisconsin Manufacturers and Commerce (WMC).
Please take the time to read both articles below and let me know if you have any additional thoughts on the issue at bboycks@wisbuild.org.
Dark Store Reform Needed to Protect Residential Property Taxpayers
By: Jerry Deschane, Executive Director, League of Wisconsin Municipalities
Imagine buying an income property without any idea of the property’s actual ability to generate income or applying for financing on a property but being told the bank will only consider as comparable properties that are vacant in declining neighborhoods. Ridiculous? Those are the essential arguments underlying the Dark Store Loopholes. Assessors are being told they need to ignore the actual rental income of certain leased retail properties, and that big box stores are so unique they can only be assessed at their value as vacant, “dark” stores.
Governor Tony Evers, Senate President Roger Roth, and two of Wisconsin’s most conservative legislators are leaders of a bipartisan majority in favor of closing the Dark Store loopholes. State Senator Duey Stroebel, a real estate developer with a master’s degree in real estate valuation, and Representative Rob Books, another real estate developer, are the point persons in the battle. They understand that the Dark Store tax advantage is unavailable to home owners, independent small businesses and residential rental property.
Local governments who are fighting Dark Store tax breaks will not see one dime in additional revenue if they are successful, but they will prevent an unfair shift to other taxpayers. Under Wisconsin law, when one property taxpayer pays less, his share his shifted to other taxpayers. Based on an analysis of the impact of these loopholes on 12 different Wisconsin communities, the League estimates that other taxpayers will eventually find themselves paying an average of 8% more in shifted property taxes. This impact will fall disproportionately on residential property, which is already picking up 68% of all property taxes.
You and your customers have a lot at stake in this fight. The building and development industry are very sensitive to property taxes, which make housing less affordable. You’re already carrying most of the load. We ask you to join your partners, the cities, villages, towns and counties who are fighting this battle, along with a bipartisan majority in the state Capitol and support closing these unfair loopholes.
Correcting the Record on the so-called “Dark Stores Loophole”
By: Cory Fish, Director of Tax, Transportation, and Legal Affairs for the Wisconsin Manufactures and Commerce (WMC)
Hiking property taxes has become a hot topic of conversation in the Capitol, in no small part because of your tax dollars. Taxpayer funded lobbyists spent your tax dollars pushing to amend the property tax levy limit, the creation of new local taxes, and making our property tax assessment system more subjective. In other words, millions of your tax dollars are spent on lobbyists in Madison to encourage lawmakers to raise your taxes.
One such proposal, the “dark stores” legislation, will increase property taxes on businesses and make Wisconsin a national outlier in both the amount of property tax we charge and the process we use to collect it. This article is meant to correct a few misconceptions about the legislation:
There is no loophole. Local governments argue that the so-called “dark stores loophole” allows businesses to lower their property tax assessments by comparing newly constructed occupied properties with vacant dilapidated properties. This is a myth because this type of comparison is already illegal. Advocates of the legislation are looking to tax business value. They argue occupancy (i.e. business value) makes a property worth more and that value should be taxed in addition to the real property.
There is no tax shift to homeowners. The shift has actually gone in the opposite direction. According to the Wisconsin Department of Revenue, over the last decade commercial and manufacturing property owners in Wisconsin have seen over a two-percent increase in their share of the property tax burden statewide, while homeowners have seen a reduction.
This bill will double tax businesses. The property tax is meant to tax real property – the land and building – not income. However, this bill will transform Wisconsin’s property taxation system into a local income tax because it will allow business value and intangible assets like financing agreements to be taxed through the property tax in addition to the fair market value of the land and building.
These subjective assessment practices will apply to all taxpayers. The legislation does not differentiate between “big box” retailers, manufacturers, or small businesses. The legislation, and the Wisconsin Constitution’s Uniformity Clause, will apply these subjective assessment practices to all property taxpayers.
Support for this legislation is support for higher property taxes.
FROM NAHB: Problem Solvers Caucus Seeks Bipartisan Housing Solutions
In a roundtable discussion moderated by 2019 Chairman Greg Ugalde during the NAHB Board of Directors meeting in Las Vegas, Reps. Tom Reed (R-N.Y.) and Josh Gottheimer (D-N.J.) expressed support for working together on a bipartisan basis to advance housing issues.
Reed and Gottheimer are the co-chairs of the influential Problem Solvers Caucus, a group 24 Republican and 24 Democratic lawmakers dedicated to finding common ground and breaking the partisan gridlock in Congress.
“We’re the only bipartisan group in Washington, D.C. that is organized,” said Gottheimer. “We will vote as a block when we get to a consensus position and we are making a difference.”
When asked by Ugalde what issues the Problem Solvers Caucus would be willing tackle, Reed responded: “Housing affordability is a very important issue.” He called for removing red tape on zoning and working to create economic opportunities for builders on the ground.
“Housing is a great issue that we will certainly look at to see what can be done there,” added Gottheimer. “We can be a great testing ground for this issue.”
The lawmakers are open to growing the ranks of their caucus, but want to make sure they find the right representatives who are willing to work across the political aisle to get things done.
“We talk to a lot of folks about joining but want people who are willing to ‘walk the walk,’” said Gottheimer. “On any given issue we can be a swing vote. That’s what matters and why we are at the table.”
Infrastructure, stabilizing the health care market under the Affordable Care Act and prescription drug prices are other areas the Problem Solvers Caucus may look to address, said Reed.
Summing up the group’s philosophy, Reed said: “We’re living in a time where there is obstructionism. We put country first.”