The following first appeared at the MacIver Institute.

Back-to-school shopping in Wisconsin is once again more expensive than in neighboring states thanks to the state’s minimum markup law, which outlaws sale prices that are too low.

The minimum markup law, formally known as the Unfair Sales Act, bans retailers from selling merchandise below cost. The law, originally passed back in 1939, also requires a 9 percent price markup on specific items like alcohol, tobacco and gasoline.

Unfortunately, Wisconsinites are forced to pay for this archaic law that’s still on the books despite ongoing efforts to repeal it.

According to advertisements obtained by the MacIver Institute from late August, Walmart stores in Milwaukee charged higher prices for a number of back-to-school items compared with other Walmart stores in Minnesota, Iowa, and Michigan.

Families in Milwaukee buying basic items like composition books, markers, and crayons can expect to pay anywhere from 12 to 146 percent more than shoppers in St. Paul, Minn., Dubuque, Iowa, and Kalamazoo, Mich.

Some common school items cost on average 90 percent more in Milwaukee. Crayola Crayons posted the single biggest price variance, costing almost 150 percent more in Milwaukee than in cities in neighboring states.

Parents picking up a Composition book in St. Paul, for example, only paid 50 cents. That same Composition book cost 56 cents in Milwaukee. Crayola markers cost 97 cents in St. Paul, but thanks to the archaic minimum markup law, those same markers cost $1.97 in Milwaukee, a 103 percent difference.

Minimum markup prices 2017.png

Walmart’s circulars boast that their great sale prices mean “$10 goes far,” but it goes a lot farther if you’re not shopping in Wisconsin. A basic shopping list would cost 90 percent more for a Milwaukee back-to-school shopper than in nearby states.

Shoppers in Illinois have previously enjoyed the same lower prices as other Midwestern states, as pointed out by the MacIver Institute last year. But this year, possibly thanks to the state’s recent draconian tax increases, families from Rockford to Chicago are joining Wisconsinites in paying inflated prices.

Efforts to repeal the antiquated minimum markup law stretch back several years.

In 2015, Sen. Leah Vukmir (R-Wauwatosa) and Rep. Jim Ott (R-Mequon) introduced a bill that would have eliminated the Unfair Sales Act. Unfortunately, the repeal bill did not receive even a public hearing in either house.

Another effort earlier this year by Rep. Dale Kooyenga (R-Brookfield) to reduce the minimum markup as part of a transportation funding package also fell flat, so the law remains on the books.

Vukmir, Ott, and other legislators haven’t given up. Earlier this year, they were joined by Sen. Dave Craig (R-Town of Vernon) and Rep. Dave Murphy (R-Greenville) in introducing a modified repeal bill.

This latest effort to relieve Wisconsinites from the burden of higher prices, however, has received the same silent treatment as previous repeal efforts.

Even though minimum markup repeal has hit a wall in the Legislature, a 2015 poll found that Wisconsinites are tired of paying higher prices and want the law taken off the books. The poll was conducted by reputable research firm Public Opinion Strategies and found that 80 percent of respondents had an unfavorable view of the minimum markup law when told “Wisconsin residents are required to pay more for many on-sale items than residents in neighboring states simply because of this 75-year-old law.”

Wisconsinites were just as angry when told that “the law forbids retailers from selling to consumers below cost and also requires that gasoline retailers sell gas to consumers with a minimum 9 percent markup, meaning Wisconsin drivers have to pay more for gas here than drivers do in other states.”

Some retailers have used the law to file complaints with the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) against competitors who were offering items for too low of a price. In 2015, MacIver first reported on numerous complaints filed against Meijer, a privately owned Michigan-based grocery and supercenter chain of stores with more than 200 locations nationwide, as it made its first foray into the Wisconsin market.

The minimum markup law also makes illegal in Wisconsin many of the discounts received on popular national bargain hunting days like “Black Friday” or “Amazon Prime Day,” which in Wisconsin could better be called “Amazon Crime Day.”

With repeal efforts on the rocks once again, bargain hunters should beware: Wisconsin’s Price Police remain on the prowl.

I joined Oliver Burrows on WXCO in Wausau to update listeners on the Foxconn deal, which went through its second public hearing at a Joint Finance meeting Tuesday in Sturtevant.

Visit WXCO here: www.1230wxco.com

I joined Bob Schmidt on Today’s Talk 1490 WLFN in La Crosse Wednesday morning to give a high-level overview of the Foxconn deal, where it’s at on the road to approval, and what to expect next.

Visit Today’s Talk 1490 WLFN here: www.1490wlfn.com/index.html

I joined Matt Kittle from the state Capitol as the Assembly Committee on Jobs and the Economy debated and votes on the historic $3 billion Foxconn incentives package. Kittle is filling in for Vicki McKenna on News/Talk 1310 WIBA.

 

I joined Vicki McKenna on Monday on her show on WIBA to talk about my column at the MacIver Institute exposing what appears to be a campaign to plant phony letters to the editor in papers around the state to manufacture a “grassroots” groundswell in favor of a gas tax increase.

The following column first appeared at the MacIver Institute.

The ground should’ve shifted beneath Madison recently when the latest Marquette University Law Poll found most Wisconsinites aren’t nearly as concerned as many have long claimed about the issue of transportation, the debate that’s plagued the state Capitol and budget process for months.

text box not willing to pay higher taxes.png

Marquette’s poll, conducted at the end of June, found that a mere 23 percent of respondents identified transportation as their top priority. More Wisconsinites identified healthcare (25 percent) and K-12 education (37 percent) as their number one concerns.

Even more tellingly, the Marquette poll found that a slim majority – 51 percent – of those who said transportation is their highest priority would not be willing to pay higher taxes for transportation, while just 46 percent said they would pay more. By contrast, 75 percent of respondents who said K-12 education is their top concern would be willing to pay higher taxes for that priority.

When given the chance to list their top two priorities, just 42 percent of respondents in the Marquette Poll included transportation, again trailing K-12 education (63 percent) and healthcare (52 percent).

In other words, transportation isn’t that hot a topic outside the beltline, and even those who say it’s their most important issue are squishy when asked to put their money where their mouth is.

Proponents of increased revenue point to a different, privately-financed poll conducted in late May to early June by Public Opinion Strategies as evidence they’re on the right side of public opinion. That poll found that 76 percent would pay $4 more a month “if it meant creating an immediate solution to fix Wisconsin’s roads,” according to a Transportation Development Association press release, which commissioned the poll.

The poll leads respondents to a desired answer by implying a measly $4 a month in higher taxes would instantly result in every single road in the state being transformed into pristine condition. It’s very easy to respond yes to that question, but fixing state’s transportation morass isn’t nearly that simplistic.

text box 77 square miles surrounded by reality.png

The TDA poll also found that voters oppose increased borrowing for transportation. But Governor Walker’s budget actually decreases road bonding to $500 million, down from $850 million in the last budget and the lowest level of bonding since the 2001-03 budget. Walker also recently offered to cut bonding to $300 million – an offer rejected by Assembly leadership.

The “revenue enhancement” crowd loves to compare transportation bonding to putting road work on the credit card, but a better comparison is buying a home. While it would be ideal to buy a house with cash, only a select few can cut a check that big.

It’s simply not reasonable to think the state can or should pay for a billion-dollar interchange project in cash.

Speaking of billion-dollar road projects, respondents to the TDA poll also oppose delaying southeast mega projects. That’s not surprising – reasonable people oppose delays in roadwork because every motorist has sat in a traffic jam surrounded by construction barrels. No one likes delays – but the fact is, the vast majority of projects throughout Wisconsin would proceed without delay under Walker’s proposal.

So while the TDA poll found large majorities generally support a small revenue increase if it would fill every pothole, seal every crack, and finish every project on time without borrowing, the Marquette poll revealed that Wisconsinites aren’t that passionate about the issue and are much more hesitant to pay more when not presented with a low-cost magic fix.

The Marquette poll contradicts claims by the “revenue enhancement” crowd that there’s an angry mob of motorists clamoring for a price hike at the pump. Proponents of a gas tax increase also like to point to spontaneous and supposedly uncoached letters that have been appearing in various newspapers around the state demanding action on road funding.

Nearly the same letter appears in newspapers around the state, all written under the same two names – Megan Delaney and Shannon O’Connell. In the Janesville Gazette, Delaney claims to be from Janesville. In the La Crosse Tribune, she says she’s from Onalaska. In the Wisconsin Rapids Daily Tribune and Stevens Point Journal, O’Connell claims to be from Wisconsin Rapids, but in papers serving Baraboo, Beaver Dam, and Portage, she says she’s from Fall Creek. In the Rice Lake Chronotype, she says she’s from nearby Barron.

text box bull in budget china shop.png

Even if there are two Megan Delaneys, one living in Janesville and one living in Eau Claire, and three Shannon O’Connells, each very concerned about our transportation infrastructure and the need for higher gas taxes, the similar language used in papers from Janesville to Rice Lake suggests something else may be afoot.

This is an astroturf campaign, the tactic of special interests that want to make it look like the rest of the state cares about their cause and sides with them.

Transportation funding has been the bull in the budget china shop for months here in Madison, but the Marquette poll and the copy-paste-repeat letter campaign suggests a different reality: Wisconsinites are not clamoring for a tax increase like some in the media are trying to portray. Real Wisconsinites are not obsessed with finding ways to increase transportation funding. Remember, according to the Marquette poll, even among those who are concerned about transportation, a MAJORITY of those transportation-concerned individuals DO NOT favor a higher gas tax or registration fee.

Legislative leaders have come up with a cavalcade of ideas for raising taxes and fees to achieve their transportation goals. They and others have floated the idea of applying the sales tax to gasoline, adding toll roads, taxing farm equipment, tacking on a new heavy truck fee, and increasing the sales tax by $1 billion – among other ideas.

The “just tax it” crowd has it backwards. Instead of using manufactured public outcry to justify wringing more money out of Wisconsin motorists, farmers, and truckers, they should support a commonsense budget that focuses on the real concerns of the majority of the taxpaying public.

To paraphrase a famous quip by Governor Lee Dreyfus, Madison is 77 square miles surrounded by reality. The heated and protracted debate over transportation funding taking place in the state Capitol is a perfect case-in-point.

The following first appeared at the MacIver Institute.

[Madison, Wis…] House Speaker Paul Ryan threw some cold water on the idea that the federal government would swoop in with more federal dollars to fund some of the state’s largest projects at a MacIver Institute event on Friday.

“Our goal is not to maximize federal spending,” Ryan said when asked about the possibility of a major spending package aimed at infrastructure. Instead, the Janesville Republican said he hopes to use fewer federal dollars with more private money to match it.

pull quote ryan federal fiscal footprint.png

“We need to take the federal fiscal footprint and make it smaller to leverage more of the private sector dollars,” Ryan said.

That’s bad news for Wisconsin infrastructure hawks who may have seen a ray of hope in Gov. Walker’s compromise proposal to cut transportation bonding by $200 million and link more spending on the state’s Southeast Freeway Mega Projects to a windfall of federal money.

The Department of Transportation reportedly plans to request $341 million in federal transportation money, significantly more than the state’s typical request of the feds.

Walker offered the revised plan in an attempt to break an ongoing budget impasse centering on the transportation budget. In addition to reducing bonding by $200 million, the compromise plan asked the Legislature to approve contingency bonding for the Southeast Freeway Mega Project program, projects receiving federal financial assistance and carrying a price tag of $500 million or more.

“Interstate 94 North/South, the Zoo Interchange and Interstate 94 East/West are high profile projects in southeastern Wisconsin. We propose contingency bonding that would be linked to additional federal funding for mega projects,” Walker wrote. “Wisconsin is well positioned to qualify for additional federal funding to help support mega projects.”

Sen. Alberta Darling (R-River Hills) is also hopeful more money from D.C. is in the offing. “The federal government budget comes out in August. We’re hoping there is opportunity for us to get a big investment out of the federal government,” said Darling, co-chair of the Legislature’s budget committee.

Ryan’s comments hint that a substantial boost in federal funding is unlikely to materialize.

Walker’s offer – which does not increase the gas tax or vehicle registration fee, one of the governor’s core promises in the budget – doesn’t seem to have persuaded Assembly leadership, which is insisting on additional revenue for the troubled DOT.

Assembly Majority Leader Jim Steineke called Walker’s proposal a “good step in the right direction” in an interview with the MacIver News Service on News/Talk 1130 WISN, but reiterated that he still believes new revenue is needed. “We need to keep some of these projects on track…and without new revenue, that’s going to be impossible to do.”

Stevens Point Democrat peddles falsehoods while stoking hyper-partisan bonfire

 

The following column first appeared at the MacIver Institute.

The day after a crazed Bernie Sanders campaign worker fired 60 rounds in an attempt to assassinate congressional Republicans, state Rep. Katrina Shankland (D-Stevens Point) took to social media to perpetuate the kind of rhetoric that seemingly motivated gunman James Hodgkinson.

On Facebook, Shankland posted a mock “GOP Health Plan” card reading “In case of emergency: Die quickly.” The unsubtle implication is that Republicans want people to die – a sad local installment of a national messaging campaign by Democrats desperate to stop the repeal of Obamacare by any means possible.

K Shankland FB Post.PNG

Her social media stunt came with a mournful missive complaining that she had been chided at the Joint Finance Committee for more over-the-top and uninformed comments about new health plan options for state employees the committee adopted.

In an effort to save $63.9 million of taxpayer money, the budget committee agreed to direct the state’s Group Insurance Board to add Consumer-Driven Health Plan (CDHP) options for state employees. CDHPs generally cover basic medical needs, but offer a lower premium in exchange for higher deductibles.

CDHPs are often paired with tax-advantaged health savings accounts (HSAs) or health reimbursement arrangements (HRAs). Employees, often supplemented by employer contributions, can put pre-tax money into an HSA to cover out-of-pocket costs and roll the account over year-to-year. Under plans coupled with an HRA, employers reimburse employees’ heath costs. The two methods can also be paired.

Both HSAs and HRAs coupled with a high-deductible plan give healthcare consumers direct control over their healthcare dollars, creating much-needed price competition in healthcare and driving prices down.

text box shankland's logic.png

Shankland claimed giving state employees the option of a high-deductible plan would cause people to forego life-saving care and ostensibly get sick and die. Women would skip breast exams, and people with chronic conditions would allow themselves to wither away. But in reality, CDHPs, HSAs, and HRAs are increasingly popular among large employers. In 2013, 39 percent of employers with 500 or more employees offered HRA- or HSA-eligible plans.

By Shankland’s “logic,” an awful lot of employers, then, want their employees to “die quickly.”

Rep. Mary Felzkowski, who actually owns an insurance firm, tried mixing in some facts. Employers have an innate incentive to keep their employees healthy and productive, she said. Add to that employees’ desire to keep their monthly premiums affordable amid rising healthcare costs and CDHPs come out as a pretty attractive option.

After scolding Shankland for her over-the-top fear mongering – saying she “should be ashamed” – JFC co-chair Rep. John Nygren also interjected with another inconvenient truth omitted by Shankland: the proposed CDHP option is just that – an option. No state employee is going to be forced into a health plan they don’t want. If they like their plan, they can keep it, unlike the millions of Americans whose coverage was cancelled thanks to progressives’ beloved trainwreck, Obamacare.

Wisconsin state employees will be able to choose a plan – if they think it’s best for them – with lower monthly premiums while covering out-of-pocket costs with an HSA or HRA, so they’ll still have essential health and medicine covered.

Offering more plan tiers with CDHP options will also save taxpayer money and help “bend the cost curve down” in the overall health care market.

Shankland is just plain wrong – her rhetoric displays her ignorance about the complexities of health insurance – and the timing of her “Republicans want you to die” rant betrays a jaw-dropping lack of judgment.

Lately, Democrats have been all too willing to use overheated rhetoric and outright lies to turn their health care policy differences with Republicans into a clash of “good people” versus “evil people who literally want you to die.”

Nygren was right. Shankland should be ashamed of herself – not just for her ignorance and over-the-top death mongering rhetoric on health insurance, but for her unabashed eagerness to throw gasoline on the political bonfire that nearly took a congressman’s life.

After unveiling their K-12 funding package at a press event yesterday, Assembly GOP leaders are hitting the road to gin up publicity, and they hope, support for the plan. An analysis can be found here.

Their proposal is the latest source of friction between the Assembly and Governor Walker and the Senate. Walker and the Senate have largely agreed on issues from property taxes, transportation, and Walker’s generous K-12 funding proposal.

Assembly leaders rolled out the funding plan in a press conference, then declared their intention to hit to road on a PR tour. Typically the time for such road shows – or as Sen. Leah Vukmir called it, a “dog and pony show” – would have been long passed and now would be the time for voting. However, the Joint Finance Committee cancelled both of its meetings this week, and whether the committee will meet next week isn’t certain.

By choosing to roll out their initiatives – which challenge Walker’s hard line on raising taxes both on property and gasoline – in grandiose fashion and then embark on a virtually unprecedented traveling circus to promote it, the Assembly appears to be waging a bizarre PR war against the Governor and their colleagues in the Senate.

The ongoing question is…why? MacIver Institute President Brett Healy talked about this on the Vicki McKenna Show today:

 

The following story first appeared at the MacIver News Service.

Americans for Prosperity is warning lawmakers about a possible plot by anonymous special interests to push small breweries, wineries and artisan distilleries out of business.

AFP has a draft proposal they say came from lobbyists who want to prevent microbreweries, wineries, and distilleries from operating taverns and selling their products to wholesalers, which is currently common practice.

This would mean beefing up an onerous “three-tier restricting” law where producers, wholesalers, and retailers are all separate entities. AFP says this would involve creating a new bureaucracy, an Office of Alcohol Beverages Enforcement in the Department of Revenue to enforce the new law.

Mark Garthwaite, executive director of the Wisconsin Brewers Guild, says the three-tier system is archaic and overreaching.

“I see no need for erecting these barriers,” Garthwaite told the MacIver News Service, adding that other states use less burdensome regulatory systems that serve the public just fine. Craft brewers support reasonable regulations that protect the public, but not protectionist ones meant to benefit particular special interests, he said.

Eric Bott, AFP-Wisconsin State Director, sent a letter on Thursday to Sen. Alberta Darling and Rep. John Nygren, co-chairs of the budget-writing Joint Finance Committee, detailing what he’s learned about the effort. AFP got its information from small businesses that would be affected and from sources in the Capitol.

Larger, well-established alcohol producers would have a much easier time complying with the strict three-tier system than smaller producers like microbreweries, small wineries, and boutique distilleries that have become increasingly popular. That increasing popularity also poses a competitive threat to larger alcohol producers.

According to Garthwaite, Wisconsin has 131 active craft brewers that produced 500,000 barrels of beer in Wisconsin in 2016, 10 percent of the overall beer market. In 2011, Wisconsin had 73 craft breweries, according to the Brewers Association.

Garthwaite also said craft breweries have a significant economic impact, both statewide and locally. “Customers like to go to the places where their beer is made.” The proposed regulations “fail the consumer” in favor of entrenched interests, he said.

The economic impact of craft breweries in Wisconsin exceeded $1.7 billion in 2014, according to the Brewers Association.

The regulations would certainly have a negative impact on the craft brewing industry, and would essentially halt the formation of new microbreweries or brewpubs – an increasingly popular phenomenon – by forbidding businesses that produce alcoholic beverages from also operating bars and restaurants. “It would kill off a lot of startups,” Garthwaite said.

AFP believes the draft proposal could be slipped into the budget’s “999” motion. That’s historically the final action JFC takes on the budget, and it’s where many policy items can be attached to the budget anonymously and at the last minute, often before even lawmakers have time to review them.

“When government takes the next step of attacking individual small business owners in secret to help the politically connected it rises to a new level of repugnancy. It’s no wonder the proponents of this motion conduct their work in the shadows,” Bott wrote to Darling and Nygren in the letter.

The MacIver News Service reached out to the offices of Sen. Darling and Rep. Nygren. This story will be updated if they respond to our requests for comment.