A handful of bills will be taken up tomorrow by the state’s Joint Finance Committee. The committee will meet Wednesday, October 12 at 11 AM in 412 East, at the State Capitol.
Here’s a short description of each bill that will be considered, along with its estimated fiscal effect:
1) Modification of the jobs tax credit (Assembly Bill 1/Senate Bill 5): Currently, companies can claim a tax credit of up to 10% of an employee’s wages, or the amount of training costs in a particular year. The Wisconsin Economic Development Corporation (i.e. the “new” public-private Department of Commerce) can allocate $5 million of these credits each year, for a maximum of $14.5 million between 2010 and July 2013. Currently, the jobs tax credit is nonrefundable for 2010 and 2011.
The Assembly and Senate bills take slightly different paths to modify the jobs tax. The Senate version, as amended, mostly increases the amount of credits available in a certain year from $5 million to $10 million. Because that bill doesn’t change the overall limit of $14.5 million that can be allocated between 2010 and 2013, there would be no fiscal effect for this biennium, and a $5 million per year effect after that.
The Assembly bill (as amended) also increases the amount of credits available in a year from $5 million to $10 million, and moves up the date by which the credits become refundable. In this biennium, the Assembly version increases tax revenue by $3.6 million and increase expenditures for the credit by $5.4 million (for a net loss of $1.8 million) in 2012, and decrease GPR expenditures by $1.7 million in 2013.
2) Provide health insurance for spouses and children of law enforcement officers who died in the line of duty (Senate Bill 18): This bill would have a relatively small cost of about $200,000 per year.
3) Modifications to how Wisconsin’s income tax treats employer-provided health benefits for dependent adult children (Assembly Bill 277\Senate Bill 203): Federal health reform now means that employers must allow employees to add their dependent, adult children up to age 27 to their health insurance. These bills would ensure that Wisconsin’s income tax treatment of these health insurance benefits is consistent with federal law. The changes are estimated to reduce revenues by $4.5 million over the biennium.
4) Advanced manufacturing grants (Senate Bill 40): This bill, as amended, would increase by $400,000 annually training grants that the Wisconsin Technical College Board awards to businesses. It also increases the amount (by $400,000 annually) that must be set aside for grants that focus on advanced manufacturing.
The four bills have a cumulative cost in this biennium of $5.7 or $5.8 million (depending on which version of the jobs credit bill is approved), and that price tag wiould grow in the next biennium. These bills will likely be taken up on the floor of the Legislature soon.