The Conservative Agenda: Keep Fighting For The Free Market

As the legislative session races to its conclusion, the MacIver Institute is tracking all the bills fiscal conservatives are pushing to rein in government and promote liberty

Sen. Craig drafting new John Doe bill that would include subpoena power for the legislature


MacIver News Service | February 7, 2018

By M.D. Kittle and Chris Rochester

MADISON, Wis. –  The clock is ticking.

Election year campaigning may cut this winter legislative session short, but conservatives say there’s much to accomplish before lawmakers head home.

And they say liberty and free markets should guide legislation the rest of the way.

“We need to be consistent with our principles. We support free markets. We support the little guy,” said state Rep. Dale Kooyenga (R-Brookfield).

On The Mark

If conservatives truly crave consistency, they’ll pass long-languishing legislation that would roll back at least some of the anti-consumer, anti-competitive elements of Wisconsin’s Unfair Sales Act – commonly known as the “minimum markup” law.

“We’ve kicked this down the road at least three sessions. It’s a horrible policy that not only harms consumers but businesses,” said Rep. Rob Hutton.

Minimum markup is a relic of the Great Depression. The law essentially makes it illegal for retailers and wholesalers to sell merchandise at a steep discount. It also mandates that gasoline and other certain products be marked up at least 9.18 percent above the wholesale cost.

Retailers face steep fines for selling goods under the artificially higher prices.

Last legislative session, Sen. Leah Vukmir (R-Brookfield) and Rep. Jim Ott (R-Mequon) introduced a bill that would eliminate the law. The repeal bill did not receive even a public hearing in either house.

Vukmir’s latest attempt to repeal minimum markup – at least on prescription drugs and certain types of merchandise –  looks like it may be heading for the same fate. Republicans whose campaign coffers have benefitted immensely from retailers that enjoy a state-mandated profit margin thanks to minimum markup have effectively stalled movement on the legislation.

“I don’t see it this session,” said Rep. Rob Hutton (R-Brookfield). “I’m really disappointed. We’ve kicked this down the road at least three sessions. It’s a horrible policy that not only harms consumers but businesses.”

Minimum markup is a relic of the Great Depression. The law essentially makes it illegal for retailers and wholesalers to sell merchandise at a steep discount. #wiright #wipolitics Click To Tweet

Vukmir said Wisconsin businesses remain at a competitive disadvantage against out-of-state retailers.

“The mandated cost markup on prescription drugs and merchandise results in Wisconsin seniors and families paying more for their goods. Eliminating this additional cost is in the best interest of Wisconsinites.”

‘Best Fiscal Reform Going’ 

Base budgeting review, one of the more potentially impactful reform measures, appears poised for passage, although it hasn’t been without delay.

The bill, authored by State Sen. Dave Craig (R-Town of Vernon) and Hutton, requires state government agencies, the courts and the Legislature to periodically review – and justify – their budgets.

Legislators in the current budget process primarily debate adjustments to spending increases for each agency but never discuss the justification to the original base budget. The bill requires agencies periodically reexamine whether programs and expenditures are “meeting the mission statement of the agency.”

Craig tells MacIver News Service that chances are good the bill will come to a final Senate vote during the Feb. 20 floor session. It will be the Senate’s second swipe at the the Base Budget Review bill, which was dropped last month from the Assembly Committee on State Affairs executive committee agenda literally in the 11th hour.

An amended version of the bill won passage in the Assembly last month, forcing legislation back to the Senate.

“I think it’s the best fiscal reform that we’ve got going,” Craig said. “The budget is the most serious piece of legislation we put forward. We have to be very diligent, making prudent decisions. How can you make prudent decisions unless you are constantly evaluating the budgets of agencies?”

More Oversight

Another Craig reform measure would provide greater oversight to agencies using so-called guidance documents used to set policy. Craig and critics of the practice say agencies use the documents to bypass legislative oversight and review.

The same problems occurred during the Obama administration, when agencies stopped creating rules and instead issued “guidance.” U.S. Sen. Ron Johnson (R-Oshkosh) introduced a bill last month he calls the Guidance Out Of Darkness (GOOD) Act. It would require all federal agencies to post their guidance on special webpages where Congress, and the public, can easily review them.

“This common-sense bill would provide much needed transparency to American businesses and consumers,” Johnson said in a press release.

Craig’s bill received a hearing Tuesday morning before the Senate Committee on Labor and Regulatory Reform.

Ending The ‘Patchwork’

Reform legislation bringing statewide uniformity to certain employment laws seems to stand a good chance of landing on the governor’s desk.

Proponents say Senate Bill 634 would end the ‘patchwork” of employment laws that create confusion, kill competition and drive up business costs based on the whims of local government.

Democrats, unions, community organizers and other opponents claim the bill is an assault on Wisconsin’s tradition of home rule.

Proponents say Senate Bill 634 would end the ‘patchwork” of employment laws that create confusion, kill competition and drive up business costs based on the whims of local government.

“We have seen a trend around this country in which local municipalities are pushing their own labor laws on how employers have to operate, setting minimum wage and living wage standards, and other things that are really contrary to how businesses need to operate,” said Hutton, co-author of the bill. “State law has to trump where local municipalities want to create hurdles for employees.”

‘Trampoline’ Legislation

Conservatives are confident that a package of welfare reform legislation will swiftly move through the Republican-controlled Legislature. Gov. Scott Walker last month called for a special legislative session to take up the bills aimed at transitioning people from state-assistance to employment.

Walker’s campaign hit the digital airwaves Tuesday with an ad highlighting the governor’s efforts to cut waste and fraud in government. It particularly focuses on the welfare reform measures.

“We’re reforming welfare, so public assistance is more like a trampoline than a hammock,” the governor says in the ad, using one of his oft-turned lines.

On Tuesday, the Assembly Committee on Public Benefit Reform approved the reform bills, with all five Republicans voting for and all three Democrats voting against.

Unemployment Insurance Fraud – It Is Theft

Bills by Sen. Chris Kapenga and Rep. Samantha Kerkman would make intentionally defrauding unemployment insurance a criminal penalty, cracking down on a significant problem and calling UI fraud what it is: theft.

According to a 2014 report from the Wisconsin Department of Workforce Development, from Fiscal Year 2011-12 to 2013-14 alone, there were nearly 65,000 cases of intentional fraud, amounting to $86.3 million in stolen money.

“Matching the penalties for UI benefit theft to those for other theft is fair…and helps ensure that the program functions for its intended purpose–a temporary safety net for those who are out of work through no fault of their own,” Kerkman (R-Kenosha) said.

Priority: Tax Cuts

Tax cuts and tax reform remain high on the to-do list for conservatives. While some fiscal hawks are less than ebullient about Gov. Scott Walker’s child tax credit plan unveiled in the Republican executive’s state of the state address last month, they say it’s critical, particularly in a tough election year, to lead on tax relief.

“As conservatives, we should make it a priority to cut taxes every year. We should build a glide path on cutting taxes,” Kooyenga said.

While Kooyenga’s IRS conformity bill may not be the most exciting piece of legislation this winter session, it could bring substantial tax savings.

Thanks to prior reforms to simplify Wisconsin’s tax code, portions of state tax law automatically conform with federal Internal Revenue code. That will mean significant tax savings for small and large businesses alike in areas like bonus depreciation. The federal tax reform package accelerated deductions on the purchase of eligible business property, and Wisconsin’s conformity laws follow suit.

Kooyenga’s bill would do the same for other areas, including changes in EdVest College Savings plans. Parents and guardians would be able to use those higher education investments for K-12 education, tutoring and other instructional opportunities.

A fiscal note, slated for release this week, is expected to show substantial revenue increases that fiscal conservatives would like to use for overall tax relief.

“We’re talking tens of millions of dollars,” the lawmaker said. “As conservatives, we should make it a priority to cut taxes every year. We should build a glide path on cutting taxes.”

Direct Primary Care – A Win-Win-Win

If the U.S. health care system is going to get out of the mess Obamacare has left, the free market will have to lead the way.

Direct primary care is a free-market method of delivering health care in which patients pay their primary care doctors directly via a monthly fee, bypassing traditional health insurance that can obscure the actual costs of procedures. The innovative arrangement is often compared to a gym membership – doctors are paid a fixed monthly fee for a set menu of services, and waiting to see your doctor is virtually eliminated.

The reforms proposed by Kapenga and Sanfelippo have the potential to save taxpayers hundreds of millions of dollars.

Since patients are paying the doctor directly and the cost of services is readily available, there’s significant downward pressure on prices as both doctors and patients shop around. And because people are getting their basic medical care from a primary care doctor instead of relying on the emergency room – a notoriously expensive method of delivering care – costs to provide basic care are significantly reduced, health outcomes are considerably better, and peoples’ quality of life is improved.

Bills working their way through the Legislature – Assembly Bill 798 and Senate Bill 670 – properly defines Direct Primary Care for what it is: Health care. And for what it is not: Insurance. Therefore, Direct Primary Care is not subject to the suffocating web of rules and regulations government places on health insurance. The proposal, authored by Sen. Chris Kapenga and Rep. Joe Sanfelippo, also authorizes a Direct Primary Care pilot program in the state’s behemoth Medical Assistance program.

The reasons for defining and expanding Direct Primary Care in Wisconsin are myriad – and the icing on the cake is that the reforms proposed by Kapenga and Sanfelippo have the potential to save taxpayers hundreds of millions of dollars.

Improving Access To Dental Care

Wisconsin’s dentist shortage doesn’t get much attention, but it should be on the Legislature’s radar. The problem is more extensive than most know: 1.5 million people in Wisconsin live in areas with a shortage of dentists, and only one-third of children on Medicaid saw a dentist in 2016, the worst rate of all states. The dentist shortage is a particular problem in rural Wisconsin and in low-income areas – 42 percent of Wisconsinites making less than $25,000 per year cited trouble finding a dentist as the reason.

A market-centered reform allowing dental therapists to practice in Wisconsin would go a long way to help ease this shortage of dental care. Dental therapists are mid-level practitioners, similar to physician assistants. Under the general supervision of a dentist, DTs can perform routine dental procedures either at a dental practice or in satellite clinics in underserved areas.

Growing the number of practitioners allowed to perform common dental procedures is the surest way to address the dentist shortage and increase access to needed dental care. Permitting dental therapy in Wisconsin would be a sensible way to accomplish this.

Cracking Down On Relentless Referendums

There’s something to be said for letting taxpayers have a direct say in the local decisions that will impact their tax bills. Unfortunately, too often, school districts treat these local referendums as mere formalities. Whenever voters say no to a tax increase, school officials simply go back to the polls again and again until the voters finally tap out.

Sen. Duey Stroebel says these are dirty tricks by school districts, and Senate Bill 195 is intended to limit such games. The bill limits the number of times a school board can seek approval from voters to increase its revenue limit to five consecutive school years.

The bill also eliminates the distinction between recurring and nonrecurring referendums and eliminates the authority of a school board to include excess revenue generated for a recurring purpose in its base revenue per pupil in the determination of a district’s revenue limit.

Another Stroebel bill, Senate Bill 191, would limit when a school district can vote to have a referendum. It requires that school districts vote to authorize a referendum only at the school district’s annual meeting – not at special meetings called for that purpose. The bill also prohibits a vote to exceed a district’s revenue limit for recurring or nonrecurring purposes at special meetings.

Fishing: Lawyers’ Favorite Pastime 

Tort reform is the task that never ends. Wisconsin Republicans have been working on it ever since the day they took over the majority in 2011, and it continues into 2018. A pair of bills working through committee right now would put restrictions on class action lawsuits and the discovery process.

Class action lawsuits will be more than familiar to anyone who still watches commercial television. A lawyer will come onto the screen announcing, “if you or anyone you know is suffering with [insert grievance] contact us at [1-800-SUE-THEM].” Reformers say these commercials are essentially fishing expeditions. Personal injury lawyers only need to find one or two people that qualify to go ahead with the lawsuit. They shoot for a fast settlement, and give the alleged victims a pittance while they take off for the bank. AB 773/SB 645 would make changes to the notification process and how lawyers take their cut.

Fishing is apparently a popular pastime for lawyers, because reformers say that’s also what the discovery process has become. Trial lawyers will make herculean demands on the companies they sue asking for mountains of documents to be handed over. The goal is to overwhelm a company into a settlement, but you never know what you’ll come across when you force a company to unload its archives. The bills would limit how long and how far this process could go, weighing the burden on the company to the likelihood the lawyer will find something useful.

The senate held a public hearing on Jan. 30, and the Assembly Judiciary Committee heard the bill the first week of January, but has yet to schedule a committee vote.

Reining in DNR

Even at a time when conservatives control all of state government, onerous environmental regulations persist.

The Federal Clean Air Act forces the sale of special reformulated gasoline in certain areas designated by the Environmental Protection Agency as out of compliance with federal air quality standards. In these areas, retailers are barred from selling regular gasoline.

Senate Bill 463 seeks to stop this. The bill requires the Department of Natural Resources to request a waiver from the EPA from these heavy-handed Clean Air Act regulations. If the waiver is granted, the DNR may not prohibit the sale of regular, non-reformulated gasoline in the designated areas.

Another bill, Senate Bill 459, also looks to cut back on DNR’s regulatory zeal. The bill requires the DNR to identify and repeal state-level regulations on air pollutants that are not covered under federal law. The proposal also sunsets any new such rule after ten years.

Investigating the John Doe Investigators

On the liberty front, conservatives are growing more optimistic that the Legislature will investigate the investigators of Wisconsin’s infamous John Doe investigation.

Craig said he’s putting the finishing touches on his bill that would create a bicameral committee – with rarely used subpoena power – to compel former agents of the disbanded Government Accountability Board, Milwaukee County District Attorney prosecutors and others to testify under oath about their involvement in the unconstitutional John Doe probe.

Legislation could be released this week.

“It’s got to pass. It’s the only way that we can bring some level of closure to the John Doe scandal, to make sure people in Wisconsin understand what happened, to make sure the Legislature understands what happened, and to make sure it never happens again.”