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May 30, 2008
WISCONSIN STATE AFL-CIO 2007–08 LEGISLATIVE SESSION UPDATE
The following report summarizes the major legislative issues that the Wisconsin State AFL-CIO addressed during the 2007-08 legislative session. A separate report on legislative efforts related to the 2007-09 Biennial State Budget (passed in 2007) is available on our legislative web site: http://www.wisaflcio.org/legislative/index.htm#LEGISLATIVE_INFORMATION The Wisconsin State AFL-CIO also assisted affiliates on legislation of concern to them.
Strides were made in pushing real health care reform. A fair tax campaign accomplished the closing of two big business tax loopholes. A good government provision was signed into law that requires accountability from businesses for the economic development assistance they receive from taxpayers, something the Wisconsin State AFL-CIO has long worked to accomplish. Child care resources were enhanced. Many issues on our Working Wisconsin Agenda passed the Democratic-controlled Senate only to be stalled in the Republican-controlled Assembly. Increasing the state minimum wage, restoring top wage lien priority for workers for all wages and benefits owed by an employer but unpaid, requiring that any work the state outsources must be done by American workers, improving equal pay enforcement, teaching labor history in our schools, the public financing of Supreme Court candidates, creating construction industry contractor registration to prevent misclassifying workers as independent contractors, extending collective bargaining rights to UW System faculty and academic staff, are just some of the issues we worked on--and which still need to be addressed. Please read the full report for more background on these and other legislative issues.
As always, my thanks to all union members who were engaged in the process. When labor’s message is delivered by members, whether back home in legislators’ districts or by union representatives at the Capitol, it makes the difference. We have proved once again that solidarity is not just a word in Wisconsin, but it is the only way we can move our collective agenda for working families forward.
Currently, the State Senate is comprised of 18 Democrats and 15 Republicans so the Democrats control that house; the State Assembly has 52 Republicans and 47 Democrats so the Assembly is under Republican control. The November 2008 elections will determine the composition and control of each house for the 2009-2010 legislative session, which will reconvene in January. We have an opportunity this fall to elect people who will help us move our Working Wisconsin Agenda. Please get engaged; it makes a difference! I look forward to working with all of you.
Phil Neuenfeldt, Secretary-Treasurer
SENATE BILLS
Requires each school district to include the history of organized labor and the collective bargaining process in its curriculum. For most of the 20th Century, Wisconsin was one of the nation’s most heavily unionized states, and this continues to be the case as virtually every family has a union member past or present in its family tree. The history of organized labor demonstrates how ordinary people can change history by organizing themselves into a powerful movement, despite opposition from what appear to be superior forces of economic might. Today, school textbooks primarily reflect the views and interests of business, and corporations use their vast resources to flood classrooms with additional instructional materials. To ignore the history of Wisconsin workers and their unions is to ignore a major part of our state’s history. SB 108 would restore some balance in the curriculum, and rely on teachers and school districts to decide how to meet the labor history requirement.
Status: Passed Senate 19 to 14 on February 19, 2008. Assembly Democrats offered a motion on March 6 to suspend the rules to take up SB 108 but it failed on a 46 to 49 vote. SB 108 died in the Assembly at the end of the session.
Wisconsin’s working families won a major victory against a new property tax loophole for corporations which resulted from a court ruling called the Newark Decision. The ruling was in favor of a paperboard manufacturer in Milwaukee owned by the Newark Group of New Jersey and it vastly expanded the interpretation of a Wisconsin property tax exemption for waste treatment facilities and pollution abatement equipment that was passed in 1953. Based on this decision and its broader exemption, it was projected that an additional $1.5 billion worth of manufacturing property statewide would have been removed from the local tax rolls. This would either shift a substantial portion of the property tax burden to residential property owners or necessitate major cuts in vital local services. SB 122 restores and clarifies the original intent of the 1953 law so that the tax exemption is used as intended for waste treatment facilities that handle industrial waste or air contaminants.
Status: Governor Doyle signed it into law after local government officials, union activists and some legislative leaders, aided by the Institute for Wisconsin’s Future, waged a major campaign for its passage and won bipartisan support.
Currently, there is a cap of $3,000 on the wages and benefits that workers can collect when a business closes and its workers are left unpaid. SB 123 restores top priority for all wages and benefits ahead of all other creditors in all cases.
Status: SB 123 was referred to Senate Veterans and Military Affairs, Biotechnology and Financial Institutions Committee where no action was taken this session. Assembly Democrats offered a motion to bring AB 403 to the floor on February 28, 2008, and it was defeated 46 to 50. Both bills died at the end of the session.
Increases the state minimum wage to $7.25 upon passage of bill and provides for annual increases based on the Consumer Price Index (CPI). According to the Center on Wisconsin Strategy, 75,000 workers would directly benefit because their wages are below $7.25. Another 180,000 workers would indirectly benefit because their wages are just above the minimum and they are expected to receive an increase as well. The total number of workers affected are equal to the combined populations of Green Bay, Wausau and Eau Claire. The legislation also indexes the minimum wage to the CPI each year. This will remove the issue from the political arena and provide rational, regular increases to keep low-wage workers from falling deeper into poverty.
Status: SB 130 passed Senate 19 to 13 on January 15, 2008. Hearing on AB 274 held by Assembly Jobs and the Economy Committee on February 27, but no action was taken and both bills died in the Assembly at the end of the session.
[Note: The state minimum wage is currently $6.50 an hour and it covers workers whose employers are not covered by the federal minimum wage—or it covers all employers if higher than the federal minimum wage. The federal minimum is currently $5.85 an hour. It will be raised to $6.55 on July 24, 2008 and $7.25 on July 24, 2009. Federal minimum wage applies to businesses with gross receipts of $500,000 or more, or those engaged in interstate commerce, which describes most employers. SB 130 would take the state minimum to $7.25 quicker and provide for annual increases.]
Requires railroads to secure the cabs of locomotives, not leave engines running unattended, have adequate qualified personnel to run trains, plus other safety requirements. Also provides whistleblower protection for employees. This legislation is initiated by rail unions in response to the increasing use of remote control technology by the railroads and the potential safety hazards that such technology can pose for both workers and the public.
Status: Senate Commerce, Utilities and Rail Committee held hearing on August 23, 2007. No action taken and SB 152 died at the end of the session.
State government can outsource work currently done by public sector employees and have it performed by domestic or foreign sources. SB 163 requires that when the state contracts for services to be performed by the private sector, those services must be performed in the U.S., unless they are not available here.
Status: The Senate passed SB 163 on a voice vote on February 26, 2008. The Wisconsin State AFL-CIO agreed to the following two amendments to address specific concerns: (1) that the legislation will not apply to the UW System when it contracts for research or instructional purposes; and (2) it will not apply if the purchase of the service is the subject of a World Trade Organization (WTO) agreement to which the U.S. is a signatory and the agreement preempts state regulation of the purchase. Assembly Democrats offered a motion to bring AB 307 (the original version of the legislation) to the floor on February 27 but it failed 46 to 51. Both bills died in the Assembly at the end of the session.
(FAVORABLE)
Wage inequity is harmful to workers who will never reach their full earning potential, and the accumulated loss of income undermines the economic security of the family unit as well. SB 165 allows employees who have experienced employment discrimination, related to equal pay or other protected classes under the Fair Labor Standards Act, to seek compensatory and punitive damages. Currently, the only remedy for victims is reinstatement, back pay and legal fees. This remedy is not significant enough to deter employers from violating the law, nor does it adequately compensate employees for violations of their employment rights. There continues to be a wage gap between male and female workers, even when experience, education and time spent in the workforce are taken into consideration. On average, a woman working full time earns around $28,000 per year, compared with more than $36,500 for a man.
Status: SB 165 passed the Senate 18 to 14 on January 31, 2008. Assembly Democrats offered a motion to bring SB 165 to the floor on February 28 and it was defeated 47 to 50. Both bills died in the Assembly at the end of the session.
Provides for public financing of qualified candidates for State Supreme Court to help restore and maintain Wisconsin’s long tradition of an independent judiciary. Will help ensure that decisions made by elected justices are based on their truly impartial interpretation of the law—not influenced by campaign contributions from wealthy individuals and corporate interests.
Status: SB 171 passed the Senate 23 to 10 on February 19, 2008. Assembly Democrats offered a motion to bring AB 250 to the floor on February 27, 2008, but it failed on a 46 to 51 vote. Both bills died in the Assembly at the end of the session.
Prohibits the use of automatic dialing devices for calls to residences, unless the person has given prior consent to receive such a call.
Status: In current form, this legislation will significantly interfere with the right of unions to call their own members and impact the calls made by allied organizations. SB 172 was referred to the Joint Finance Committee and it died at the end of the session.
Develops a licensing procedure that will ensure a trained and qualified workforce of heat and frost installers, so that thermal system insulation will be properly installed on or around mechanical systems (heating, ventilating, cooling, plumbing or refrigeration).
Status: Passed the Senate 26 to 7 on February 19, 2008. SB 194 was referred to the Assembly Jobs and the Economy Committee where no action was taken, so it died in the Assembly at the end of the session.
Provides a much needed expansion of rights under Wisconsin’s Family and Medical Leave Act to make it easier for working parents to be involved in their children’s education and monitor their care. SB 195 allows 16 hours of Family and Medical Leave to be used by working parents to participate in school activities, or monitor the child care or preschool in which their children are enrolled. Research has shown that parental involvement is more important than family education level or income in determining a child’s achievement.
Status: Hearing held on December 6, 2007. No action was taken by the committee so the bill died at the end of the session.
This legislation is needed in response to a growing problem in the construction industry of unscrupulous employers who fraudulently misclassify workers as “independent contractors”. By doing so, contractors get a competitive advantage because they do not withhold federal and state taxes, pay into the Unemployment Insurance fund, purchase Workers Compensation coverage, or pay any of the usual employee benefits. SB 228 requires construction contractors to register with the state Department of Commerce, plus other requirements that will curtail misclassification of employees.
Status: SB 228 passed Senate 28-4 on November 8, 2007. A hearing was held by the Assembly Housing Committee on January 24, 2008 but the chair refused to schedule a committee vote on the bill. SB 228 died in the Assembly at the end of the session.
Deprives local municipalities of any jurisdiction to establish standards for commercial construction (places of employment and public buildings) and preempts any local code that is stricter than the code adopted by the state Department of Commerce (DOC). Currently, local governments have the right to enact stricter and more protective commercial building codes based on local values and needs. SB 226 would create a statewide commercial building code with standards developed by DOC, primarily with the input of developers and contractors.
Status: AB 521 passed the Assembly Labor and Industry Committee on a 5 to 3 vote and was referred to Joint Finance on December 4, 2007. SB 266 had a hearing in the Senate Commerce, Utilities and Rail Committee on September 27, 2007. No further action was taken and the legislation died at the end of the session.
Extends collective bargaining rights to approximately 17,000 state employees who are UW System faculty and academic staff. This is the largest group of public employees in the state who are denied the freedom to organize. In all states bordering Wisconsin, as well as a majority of states in the country, university faculty and academic staff have the right to collectively bargain.
Status: SB 353 passed the Senate 21 to 12 with bipartisan support on February 19, 2008. Both bills were denied a hearing in the Assembly Colleges and Universities Committee. Assembly Democrats offered a motion to bring SB 353 to the floor on March 6, but it was defeated 45 to 50. The legislation died in the Assembly at the end of the session.
This legislation will provide the public with a more complete disclosure of the taxes paid by corporations in Wisconsin so that an accurate analysis of Wisconsin’s tax system—and its fairness—can be made. SB 367 requires all publicly-held companies doing business in Wisconsin to submit publicly accessible annual disclosures of their income and all items used to reduce their Wisconsin tax liability. (This will not apply to 99% of companies, but to the one percent that are publicly held—which are the largest firms.) A report by Institute for Wisconsin’s Future documents that large multi-state and multi-national corporations have developed sophisticated ways to avoid taxes. These corporate tax loopholes cost state and local governments $1.3 billion each year.
Status: SB 367 referred to Senate Tax Fairness and Family Prosperity Committee and AB 751 was referred to the Assembly Ways and Means Committee. Assembly Democrats offered a motion on February 27, 2008 to bring AB 751 to the floor, and it failed on a 45 to 52 vote. Both bills died at the end of the session.
This is the agreed-upon bill negotiated by labor and management representatives on the Workers Compensation Advisory Council. Increases Permanent Partial Disability indemnity rates by $10 weekly in 2008 and in 2009 (basically a cost of living increase). Raises the minimum indemnity payment for those who are Permanently and Totally Disabled from the rate in effect in 1987 to the rate in effect in 1992. Unfortunately, Wisconsin law does not contain any automatic cost of living adjustments for these severely injured workers. The Wisconsin State AFL-CIO will continue to place top priority on addressing this issue in future negotiations.
Status: Passed the Senate 31 to 0 on February 28, 2008. Passed the Assembly on March 12 by voice vote. SB 430 was signed into law by the Governor.
This is the agreed-upon bill negotiated by labor and management representatives on the UI Advisory Council. In 2008, maximum benefit levels are held at the 2007 level. In 2009, maximum benefit levels increase by $8 per week. The UI tax on employers is increased to ensure the solvency of the UI Trust Fund.
Status: Passed the Senate 30 to 1 on February 28, 2008, and the Assembly on a 76 to 21 vote on February 29. SB 431 was signed into law by the Governor.
Some correctional institution inmates are abusing the state’s John Doe proceeding, which allows anyone to bypass the local district attorney and file a complaint directly with a judge alleging that a crime has been committed. Certain inmates are harassing correctional officers by requesting judges to initiate proceedings against the officers, and these state employees are incurring legal costs to defend themselves against unsubstantiated complaints. This legislation would specify that individuals within our criminal justice system would need to file a complaint with a district attorney, rather than a judge, when it relates to actions of certain public employees under certain circumstances.
Status: AB 695 passed the Assembly floor on February 26, 2008. SB 432 was referred to the Senate Judiciary, Corrections and Housing Committee which offered a modified version of the legislation. Agreement could not be reached before the session ended so all versions of the legislation died.
Prohibits health care employers from forcing nursing, clinical and laboratory staff to work overtime, unless there is an unforeseen emergency. SB 512 is needed because many health care employers use mandatory overtime as a cheaper alternative to hiring additional staff. Whether staff are providing direct nursing care or running critical medical tests, their decisions can have major—even life-threatening—implications for patient care. Over the long term, routine forced overtime leads to employee burnout, causing talented nurses to leave the profession.
Status: The Senate Labor Committee held a hearing on SB 512 on February 27, 2008, approved the bill, and then referred it to the Joint Finance Committee. Assembly Democrats offered a motion to bring AB 926 to the floor on March 11 but it was defeated 46 to 51. The legislation died at the end of the session.
Closes a tax loophole used by Wal-Mart and other corporations to substantially reduce their corporate income tax through the use of a real estate investment trust (REIT). For example, Wal-Mart will designate one subsidiary to operate its stores, but the stores are actually owned by an REIT that Wal-Mart controls. The stores then pay “rent” to the REIT and, with the resulting tax benefits this provides, Wal-Mart substantially reduces its tax liability in Wisconsin. Profits still accrue in Wal-Mart’s pocket but the scheme denies Wisconsin citizens and their state government millions of dollars in revenue from corporate income taxes. SB 527 would disregard certain transactions, for income and franchise tax purchases, for amounts paid to a real estate investment trust (REIT).
Status: SB 527 was scheduled for hearing by the Senate Tax Fairness and Family Prosperity Committee hearing on March 5, but was superceded by other pressing end-of-session issues and died at the end of the session. However, Governor Doyle included the elimination of the REIT corporate tax loophole in his version of Special Session AB 1 Budget Adjustment Bill. Democrats added a provision that also includes restrictions on using deductions for interest—not just rent—to avoid paying corporate taxes and extends the application beyond traditional corporations to include S-corporations and insurers. So this corporate tax loophole was closed and will bring in about $15 million during this biennium.
Creates a Healthy Wisconsin Authority to provide comprehensive, affordable health care to everyone in Wisconsin who is not covered by a government program such as Medicare, Medicaid or BadgerCare.
Status: Senate Democrats included the original version of Healthy Wisconsin in their proposed 2007-09 State Budget, but it was fiercely opposed by Assembly Republicans and removed so that a compromise could be reached. SB 562 is a slightly revised version of Healthy Wisconsin. This version phases in the payroll assessment for small employers with 10 or fewer workers and it includes a family cap of 4% on the payroll assessment for individuals. SB 562 had a hearing in the Senate but died at the end of the session. Senate Democrats will schedule hearings on the proposal during the summer, and the Wisconsin State AFL-CIO will continue the campaign for Healthy Wisconsin and fundamental health care reform throughout the 2008 election campaign. [For more detailed information on this proposal, go to www.wisaflcio.org and click on Healthy Wisconsin.]
Makes improvements to Wisconsin’s prevailing wage law, which is a vital labor standard for workers employed in the building and construction industry. Prevailing wage requires that employees on publicly-funded construction projects be paid wages that are prevailing in the area that the work is to be done. The wage rates are determined by the state Department of Workforce Development (DWD) based on an annual wage and benefit survey of state contractors. Prevailing wage law ensures that projects funded with taxpayer dollars will not be awarded to contractors that submit low bids simply by undercutting local area wage rates. Since low wage rates generally correlate with less skilled labor, prevailing wage law also protects the public from inferior construction on public works projects. SB 568 improves current law in the following ways:
(1) Expands prevailing wage law to cover all construction projects that receive public funds, such as TIF (Tax Incremental Financing) districts and others that use creative financing methods.
Currently, state prevailing wage law does not apply to local development projects generated through public subsidies or other publicly-supported financing mechanisms. Yet, a public entity will facilitate the project by providing public assistance. For example: in a TIF district, a municipality issues bonds for millions of dollars to pay for public improvements (roads, sewers, water lines, streets, etc.) in areas designated for development. Until all the costs of the public improvements are paid, property taxes collected from the new TIF district are used solely to pay off the municipal debt incurred for the project. During that time, all other property taxpayers must compensate for the tax revenue lost to the general county, municipal and school district coffers. So TIF projects essentially rely on public funds for financing, and construction in those districts should be under Wisconsin’s prevailing wage law.
(2) Requires contractors to submit certified payroll records to verify their compliance with prevailing wage law. Currently, contractors and subcontractors are required to sign an affidavit of compliance following work performed on a public project, stating that they paid the proper hourly rate of pay and benefit level by work classification as determined for the project by DWD. There is, however, no independent verification procedure to ensure that the information contained in the affidavit is true. This provision would require state and local agencies that award construction contracts to require contractors to submit certified payroll records so that the payment of proper prevailing wage rates can be verified.
(3) Removes the fee assessed on prevailing wage claim investigations that fail to produce a contractor violation, and replace with a fee assessment only for investigations deemed frivolous. Currently, DWD can begin a wage claim investigation based on an employee or third party complaint that prevailing wages are not being paid by a contractor on a project. If the
(4) contractor is not charged with a violation, the claimant is assessed a fee for the cost of the investigation. This creates a disincentive for filing a claim due to fear of the financial penalty for an unsuccessful outcome. SB 568 allows DWD to assess a fee for an investigation if the prevailing wage claim is found to be without merit, but only if it is deemed to be a frivolous claim (such as one meant to harass a contractor).
Status: SB 568 was introduced near the end of the session, but these proposed prevailing wage improvements can be discussed with state legislative candidates during the 2008 election campaign. The legislation will need to be reintroduced in the 2009-2010 session which begins in January.
[Note: Resolutions are introduced by legislators to express a position or send a message to Congress from policymakers at the state level. They can be issued jointly by the Senate and Assembly or separately by each house, and are not sent to the Governor for signature.]
SR 7 calls on the Congress to support the federal Employee Free Choice Act (EFCA) which will protect the rights of working people to form unions and bargain for a better life. EFCA will: (1) give workers the right to be represented by a union when a majority in the workplace voluntarily sign union cards; (2) provide for mediation and arbitration to achieve the first contract (because even when workers successfully organize their union, the employer often refuses to bargain in good faith as required by law); and (3) set meaningful penalties for violations of a worker’s freedom to choose a union. SR 7 was introduced by Democratic leadership in the Senate because current federal labor law does not provide strong, effective remedies when workers who try to organize a union are fired, spied on, threatened and intimidated by employers. More than half of U.S. workers say they would join a union if they could, but federal labor law has become a tool for employers to fight unionization. This effectively denies workers their freedom of choice and voice in the workplace, which is one of major reasons for the growing income inequality in America.
Status: SR 7 passed the Senate on a 23 to 10 vote on May 16, 2007 and a copy was sent to the Wisconsin Congressional Delegation. Assembly Republican leadership did not introduce a similar resolution in that house.
ASSEMBLY BILLS
The Bush administration pushed through Congress some unusually generous tax breaks for Health Savings Accounts (HSAs), but only if these accounts are paired with a high-deductible health insurance policy with a minimum deductible of $1100 for individuals and $2200 for families (adjusted annually). This consumer-driven health insurance approach is being promoted to oppose the growing movement in the U.S. for some form of universal health coverage. AB 47 would give generous tax breaks to HSAs at the state level as well. (This would cost Wisconsin $39.1 million in lost tax revenue in the first three years alone—funds that the state would otherwise use for vital public services and education.) The position of the Wisconsin State AFL-CIO is that AB 47 promotes the wrong path to health care reform because this so-called consumer-driven approach will shift more health costs from employers to employees, increase the cost of traditional comprehensive insurance coverage, discourage individuals from getting timely and necessary medical attention, fail to control health costs, and serve as tax shelters for the wealthy. (For more on AB 47, see the issue paper at: www.wisaflcio.org/legislative/index.htm#)
Status: AB 47 passed the Assembly on a 60 to 35 vote. It died in the Senate at the end of the session.
Consolidates the state’s economic development programs and requires accountability from businesses for the public assistance they receive. AB 741 requires clear and measurable goals for economic development programs, along with systematic reporting of outcomes, so that the state can develop a better scorecard on what works best to retain and create family-sustaining jobs. This accountability for the investment of public funds is essential given the major fiscal challenges faced by state government and Wisconsin taxpayers. For years, the Wisconsin State AFL-CIO initiated legislation to require similar reporting and accountability standards and we are pleased that this “good government” initiative finally received bipartisan support.
Status: Passed both houses of the Legislature and was signed into law by Governor Doyle. ______________
For further information contact: Phil Neuenfeldt, Secretary-Treasurer, at 414.771.0700, ext. 13, or pneuenfeldt@wisaflcio.org or Joanne Ricca, Legislative and Policy Research Director, at ext. 24 or jricca@wisaflcio.org
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