By M.D. Kittle | Wisconsin Reporter

MADISON — Looking to bring a compromise bill he could “defend” in his 17th Senate District, state Sen. Dale Schultz, R-Richland Center, on Tuesday introduced an alternative, bipartisan mining proposal with state Sen. Bob Jauch, D-Poplar.

The bill emerged late Tuesday afternoon.

None of it sat well with Assembly Republicans, who are pushing for approval of their arguably more mine-friendly bill by the end of session next month.

Schultz and Jauch said the proposal, billed as the Wisconsin Way Mining Reform Act, “strikes a balance between job creation and environmental regulations.”

Among its provisions, the bill:

• Requires the company to pay up to $2 million for staff from the state Department of Natural Resources, or DNR, needed to prepare a mining permit, and requires that the applicant pay the full cost of the environmental impact statement
• Requires $5 million in upfront guaranteed payments from the mine company in lieu of property taxes to communities in the shadow of the mine during its first five years in operation. The idea behind the provision is to bring immediate financial impact to mine communities.
• Demands full collaboration with state, federal and tribal and local governments.

‘Golden rule’

Schultz said the proposal draws from existing metallic mining laws, providing certainty for mining permit applicants and the potentially impacted communities while not sacrificing “our state’s treasured land ethic.”

“There are only a few places in this state where viable iron deposits exist, and my district happens to be one of them,” the lawmaker said in a statement.

“That’s a golden rule I’ve tried to keep in mind throughout this process. Could I defend this legislation if it came to Sauk County?” Schultz said. “With the Wisconsin Way Mining Reform Act, I believe I could.”

Jauch, whose 25th Senate District covers Gogebic Taconite LLC’s proposed $1.5 billion open-pit iron mine, said his goal has been to “create responsible iron mining reform in a responsible process” from the moment the controversial issue came to the Capitol.

“This is the culmination of months of public input,” Jauch said in the statement. Neither Jauch nor Schultz, who each spent much of Tuesday on the Senate floor or in caucus, returned phone calls from Wisconsin Reporter.

Competing bills

The senators, like fellow members of the Senate Select Committee on Mining Jobs, are political orphans of the committee, disbanded last week by Senate Majority Leader Scott Fitzgerald. The Juneau Republican said he acted because “Wisconsin needs jobs, not politics.”

Eleven of 17 Republican senators co-introduced Senate Bill 488, the companion to Assembly Bill 426, vehemently opposed by Democrats and environmental groups. Schultz was not in that camp.

“I am introducing a Senate companion, because the time to move this legislation is now. … Not moving forward could cost this state thousands of jobs and a $1.5 billion private investment, which we may never see again,” state Sen. Pam Galloway, R-Wausau, said last week.

The substitute bill, which could stand in for Assembly or Senate legislation, more than likely would have to be adopted through the Joint Finance Committee, as mining legislation moves through that body.

Andrew Welhouse, spokesman for Fitzgerald, declined to speak to the bill, saying he had yet to see it as of late Tuesday. Such was the case for several Republican lawmakers.

Assembly Republicans were quick to criticize the compromise bill that they say, on its face, is “based largely on a substitute amendment that was already rejected by the Assembly, because it ensures that no company will ever do business here.”

“We need a bill that is going to bring mining back to the state of Wisconsin and create thousands of jobs for struggling workers statewide,” said a joint statement from Assembly Speaker Jeff Fitzgerald, R-Horicon; Assembly Majority Leader Scott Suder, R-Abbotsford; and Joint Finance Co-Chairman Robin Vos, R-Burlington.

Majority leadership said they are open to working with the Senate on a compromise, but “tax increases and legal red tape that will deny Wisconsin thousands of jobs and billions of dollars in revenues are non-starters in this house.”

Digging for support

Todd Allbaugh, Schultz’s chief of staff, said the notion that the compromise legislation raises taxes is a stretch. He said the proposal, calling for $5 million up front from the mine company, would cost Gogebic about $75,000 over the life of a $1 billion-plus project.

He said Schultz and Jauch plan to release a memo from the Joint Legislative Fiscal Bureau on Wednesday that details the cost of the proposal.

Bill Williams, CEO of Gogebic, declined to comment on the bill late Tuesday, saying he had just received a copy. The executive of the Florida-based mine company has seen at least three different proposals over the past week.

A poll recently conducted by Public Policy Polling for the Wisconsin League of Conservation Voters, a nonprofit environmental group, found 49 percent of respondents were opposed to iron ore mining permit changes, while 34 percent supported streamlining the process.

The poll surveyed 866 Wisconsin voters on Feb. 17-18, with a margin of error of plus or minus 3.3 percent.

Sean Lansing, spokesman for Suder, said he had not seen the poll, but from the perspective of the lawmaker’s office, constituents and Wisconsin residents at large “want this thing.”

“People in this state want jobs, and there is nothing we can do that will create as many jobs as this bill will,” Lansing said.

Pennsylvania Department of Revenue Secretary Dan Meuser said to the state Senate Appropriations Committee the state could be collecting an additional $42.8 million from online vendors and those who buy those goods online.

By Gene Meyer | Kansas Reporter

TOPEKA — Kansans are paying the ninth-highest state and local sales taxes in the nation, a new survey shows, but residents should not expect relief anytime soon, tax-cut advocates say.

Higher sales taxes are one of the costs of cutting or eliminating income taxes, which is a higher priority for many state lawmakers and Gov. Sam Brownback.

“Sales taxes have the least effect on business’ decisions to make the capital reinvestments that will cause our economy to grow,” said state Rep. Richard Carlson, R-St. Mary’s, who chairs the House Taxation Committee.

Kansas sales taxes were 23rd highest just two years ago, when the 2010 Kansas Legislature increased rates by a penny to stem a decline in state tax revenue. That penny amounted to a 19 percent increase from Kansas’ previous 5.3 percent rate, “and I knew it would put us in the top 10,” Carlson said.

Kansas’ higher sales taxes create some competitive problems for eastern Kansas retailers in Atchison, Leavenworth and Kansas City, who compete with Missouri, which has the nation’s 14th highest sales taxes, said Dan Murray, Kansas head of the National Federation of Independent Business, the nation’s largest advocate for small, independent business owners.

“I know that, because I live in the Kansas City area and I go to Costco in Missouri because it’s cheaper,” Murray said. “Even so, every time we survey our members, they tell us that controlling income taxes and property taxes are a higher priority than sales tax.”

He’s not alone.

“We know sales taxes make a difference over time, even if we can’t put a number on it,” said Ruth Comer, spokeswoman for Hy-Vee Stores Inc., a regional supermarket chain in West Des Moines, Iowa, with more than 20 Kansas City area stores on both sides of the Kansas-Missouri line.

“There is a noticeable segment of our customer base that is willing to travel a bit to save a penny or two,” Comer said.

Consumers who don’t have such opportunities to hop a state line to save money aren’t such big fans of higher sales taxes, said Evis Cranford, a 72-year-old retired Wichita school administrator.

“On a fixed income, you deal with basic necessities,” Cranford said.

“You keep an eye on where prices are best and, if you need to, you see what you can do without,” he said. “Higher sales taxes put a real burden on your income.”

In the big picture, macro-economic world where tax policy theorists work, that burden is not all bad, said Scott Drenkard, a research analyst at the Tax Foundation, a Washington,D.C.-based nonpartisan tax research and education provider that calculates state tax rankings.

“If you tax something, you’re going to get less of it,” Drenkard said.

“If you tax sales, you get less sales, which increases your opportunity to save and to invest,” he said. “Sales taxes are the only ones that don’t discourage investment. They are better than income taxes for economic growth.”

Kansans, on average, pay about an 8.26 percent sales tax on merchandise they buy, which is the ninth highest total in the nation, Drenkard reported in a Tax Foundation annual survey Wednesday.

Consumers in three neighboring states pay lower rates — 6.77 percent in Nebraska, 7.44 percent in Colorado and 7.49 percent in Missouri — Drenkard said. Oklahomans, who pay an average 8.66 percent, the nation’s fifth-highest rate, are the only Kansas neighbors who pay more, the survey showed.

The actual rates consumers pay in any of those states varies because cities, counties and other special taxing districts often add their own sales taxes to basic statewide sales taxes set by legislators.

Kansans or Kansas visitors, for example, pay sales taxes as high as 11.3 percent in a special Junction City hotel and shopping district off Interstate 70. Or they pay as low as the basic statewide 6.3 percent in more than three dozen counties where local governments don’t charge any local sales taxes.

“No one moves out of Kansas because sales taxes are too high,” said state Sen. Les Donovan, R-Wichita, and chairman of the Senate Assessment and Taxation Committee.

“They do move out, to Oklahoma, because our income taxes are higher,” Donovan said. “The governor is on the right track. We need to ‘incentivize’ businesses to move to Kansas.”

Donovan was referring to Brownback’s plan, unveiled in January, to cut Kansas income taxes as much as 24 percent immediately and eliminate them entirely after that by holding spending growth to 2 percent annually.

Carlson, the House Taxation Committee chairman, is proposing a broadly similar plan that curbs spending and cuts taxes, but doesn’t eliminate as many tax deductions and credits than Brownback’s proposal.

“True tax reform doesn’t occur in a vacuum without controlling expenditures,” Carlson said.

Both those proposals, along with a third tax reduction plan that was sidelined during the 2011 Legislature, “get our income taxes to zero,” said Kent Eckles, vice president for government affairs at the Kansas Chamber of Commerce, the state’s largest business lobby.

“We’ve got three vehicles to do that, and there are more to come,” Eckles said.

The chamber has no such plans to seek lower sales-tax rates.

By Benjamin Yount | Illinois Statehouse News

Quinn on Wednesday named Bob Flider as director of the Illinois Department of Agriculture. Flider, who has started the job, will be paid $133,273 annually, though the Quinn administration is quick to point out that the director of agriculture’s salary is set by state statue.

Flider, a former Democratic state representative from the Decatur area, lost his re-election bid in November 2010. But he returned for a lame duck session in January 2011 — before the new General Assembly was sworn in — and voted for Quinn’s 67 percent income tax increase and 47 percent corporate tax increase

• A state representative from 2003 to 2011, part of which he served on the House Agriculture and Conservation Committee;
• The mayor of Mount Zion from 1995 to 2003;
• A Mount Zion village trustee from 1991 to 1995.

By Lynn Campbell  |  IowaPolitics.com

DES MOINES — Delia Meier, whose family owns the Iowa 80 Truckstop in Walcott, which calls itself “the world’s largest truck stop,” said an increase in Iowa’s gas tax would be bad for business.

“I’m on the eastern side of Iowa and currently on diesel fuel, we’re 1 cent higher than Illinois now,” Meier said. “So I’m already at a disadvantage. Adding another 10 cents or even 8 cents just makes me that much further out of the market. It’s not something that we can absorb. Not only do we lose customers, but Iowa loses revenue.”

Meier said trucks can go 1,000 miles without re-fueling, and Iowa is 300 miles wide. She said increasing the gas tax will move Iowa from the 38th to the 18th highest state in fuel tax and will lead truckers to bypass Iowa truck stops like hers, which employs more than 500 people and has been open 24 hours a day, seven days a week since 1964.

But Meier’s concerns weren’t publicly discussed when a second legislative panel Wednesday gave its stamp of approval to increase Iowa’s gas tax to pay for improvements to the state’s roads and bridges. Lawmakers only made comments for the bill.

“I think the general public is furious about this topic,” Meier said. “I think they don’t believe that this could possibly be considered (in a year that) the economy’s down, fuel prices are up. Why would this be considered this year? I think there’s quite a bit of disbelief that this could possibly be happening.”

The Iowa Senate Transportation Committee voted 11-2 for Senate Study Bill 3141, which would increase Iowa’s gas tax by 5 cents in 2013 and another 5 cents in 2014. The bill also calls for the state to look at ways to get hybrid, high-fuel efficiency and other alternatively fueled vehicles to pay their share for Iowa’s roads.

“I think it’s high time we do this,” said Iowa Senate Transportation Chairman Tom Rielly, D-Oskaloosa. “… It’s about improving the safety of our roads and putting people back to work.”

State Sen. Daryl Beall, D-Fort Dodge, said he sees this as a user fee, rather than a gas tax.

“As a user’s fee, a lot of the users of those roads are out-of-state drivers,” Beall said. “This allows them to pay for it. But it’s also an investment in Iowa jobs.”

Wednesday’s vote came after an Iowa House subcommittee on Monday voted to increase Iowa’s gas tax by 8 cents per gallon. House Study Bill 547 would raise the tax paid on new vehicle purchases from 5 percent to 6 percent of the purchase price. It also calls for new yearly fees for hybrid vehicles and vehicles that run on alternative fuels, like propane or natural gas.

Iowa currently charges 21 cents per gallon of gasoline, and 19 cents for ethanol-blended fuel. The last time the state increased its gas tax was in 1989.

“It’s a good state to do business in right now,” said Meier, who’s also president of Truck Stops of Iowa, an association representing all of the largest truck stops in the state. “An 8-cent or a 10-cent increase on diesel fuel makes us very uncompetitive with the surrounding states … That kind of label really hurts us in Iowa to be a high-tax state.”

Gov. Terry Branstad‘s Transportation 2020 Citizen Advisory Commission in November identified a $1.6 billion annual shortfall for transportation infrastructure needs. That included $215 million a year that’s considered “critical.” The panel recommended increasing Iowa’s gas tax as much as 10 cents a gallon.

City and county officials have been especially vocal in advocating for an increase in the state’s gas tax, saying money is needed to repair crumbling roads and bridges, which are key to Iowa’s agricultural services and wind-energy companies. Other backers of the plan include economic development groups, the Iowa Farm Bureau and labor unions.

Kelly Danaher, 29, of Riverside, who makes a 40-minute commute to Mount Pleasant for work each day, said she sees a bright side in a potential gas-tax increase.

“As much as it sounds horrible to have to spend more money for gas, maybe it might be an incentive for people to look for alternative sources beyond gasoline,” Danaher said. “I now commute to work and I hate it. It’s super expensive and terrible and has been a big issue in our budget.”

But 62.1 percent of 600 Iowa registered voters oppose proposed increases in the gas tax and new vehicle registration fees, while 34.1 percent support them, according to a poll by the Legacy Foundation, a nonprofit that promotes individual liberty, free enterprise, and limited and accountable government. The Feb. 6-7 poll had a margin of error of plus or minus 4 percentage points.

Regular unleaded gasoline averaged $3.45 per gallon across Iowa on Tuesday, according to AAA, which lobbies for driver and passenger rights, and safer vehicles. That’s up 9 cents per gallon from last week, and up 31 cents per gallon from a year ago. The national average was $3.52 per gallon, up 4 cents from last week.

Iowa State University economist David Swenson said an eventual 10-cent-a-gallon increase in the gas tax would amount to $32 a year for the average commuter. However, the potential increase in the gas tax comes as Iowans brace for the possibility of paying $4 or $5 for a gallon of gas this summer, according to some analysts.

Listen to interview with Meier:
http://www.iowapolitics.com/1009/120215Delia_Meier.mp3

Listen to comments by Rielly:
http://www.iowapolitics.com/1009/120215Tom_Rielly.mp3

Listen to interview with Danaher:
http://www.iowapolitics.com/1009/120215Kelly_Danaher.mp3

See the Legacy Foundation poll:
http://legacyfoundation.us/poll-shows-iowans-oppose-fuel-tax-increase/