|Welcome to Construction Business Group's Industry Updates. This monthly e-newsletter will help us communicate the important initiatives that we have underway and relevant updates on issues that impact Wisconsin's construction industry.
Message from Executive Director
As June ends, so too does the work of the Wisconsin Legislature on the 2019-2020 State budget. This week both the Assembly and the Senate passed the biennial budget (
), which is now headed to Governor Evers' desk for consideration. Among the highlights of the budget bill are:
- an increase of $467 million to transportation over the next two years;
- an allocation of funds for WisDOT to study mileage-based fees and tolling as potential sources of transportation revenue (NOTE--the final budget does not contain a provision allowing the Joint Finance Committee (JFC) to implement mileage-based fees without a full vote of the Legislature, a controversial provision that was originally approved by the JFC;
- substantial limitations on a local municipality's ability to regulate quarries, including blasting at a quarry; and
- approximately $1.9B in funding for state building projects, which is a significant increase over the previous two budget cycles.
In addition to the budget bill, three transportation policy bills were passed by the Assembly and the Senate and are also headed to Governor Evers' desk for consideration.
- Assembly Bill 273 requires WisDOT to maintain a list of at least seven subbase materials that provide equivalent structural properties for highway projects. The final decision on subbase materials may be made by the project's engineer of record.
- Assembly Bill 275 requires WisDOT to maintain an inventory of five highway projects suitable for selection as design-build projects.
- Assembly Bill 284 requires WisDOT to develop a discretionary merit award program to provide monetary awards to employees who have implemented business processes that save money or promote efficiency and innovation.
Another transportation policy bill, Assembly Bill 285 did not pass the Senate and has instead been referred to the Committee on Senate Organization. AB 285 would require WisDOT to rebid any project that attracted one bid and was in excess of 110% of the project estimate and would increase the competitive bidding threshold for most local building projects from $25,000 to $50,000.
While the construction industry was hoping for more funding for both the transportation and capital budgets, the increases that passed both houses of the Legislature are a substantial improvement over the previous two biennial budgets.
Building Wisconsin Together
DCA students enter apprenticeship
Destinations Career Academy (DCA) is the online public charter school for the Operating Engineers pre-apprenticeship program. This past school year graduated the first students from the program and four of the recent graduates are already working as apprentices.
Congratulations to the following former DCA students who have entered into apprenticeship with the Wisconsin Operating Engineers:
- Jacob Doebert: Buteyn-Peterson
- Zachary Karsten: JF Brennan
- Anthony Koller: Hoffman Construction
- Jacob Nottestad: Mashuda Contractors
As DCA enters into the third year, tremendous interest has been generated and enrollment continues to increase. An important component of the program is connection with local contractors. If your company is willing to provide local students the opportunity to learn more about the industry through job shadowing, tours, classroom visits or employment, please email Laura Cataldo or contact her at 608-616-2835.
Industry News and Updates
Save the Date for
CBG Winter Conference
March 5-6, 2020
Wisconsin Dells, WI
Click here for further information.
42% Increase in Taxpayer-Funded Work Awarded to Out-of-State Contractors
Every year, Wisconsin municipalities hire private sector contractors to construct and/or renovate municipal buildings, streets and other infrastructure such as water and sewer lines. These public works projects are primarily funded through a combination of state and local tax dollars.
Recently, data was published which revealed a sharp increase in the dollar value of municipal public works project contracts awarded to out-of-state contractors. In 2015, out-of-state contractors were awarded $72.6 million in municipal public works contracts. That number grew to $146 million in 2018 - a 42% increase.
Studies show that for every dollar of construction value that is completed by an out-of-state contractor, $2.26 in economic value is lost in Wisconsin. Therefore, in 2018, Wisconsin lost over $329 million in economic activity by having out-of-state contractors perform these local taxpayer-funded projects.
In response to this troubling information, John Gard, President of WIB, issued the following statement:
"WIB members, Wisconsin-based contractors, and the local workforce they employ, who are key to the success of our State's economic strength, are deeply troubled by this trend. Not only has there been a sharp uptick in contractors from neighboring states taking Wisconsin work, but contractors from states as far away as Louisiana, Georgia, Texas, North Carolina and Kentucky are working on our local projects.
We know that many of these out-of-state contractors are bringing their own workforce with them, rather than employing local hardworking Wisconsinites. Wisconsin contractors and construction workers are being hurt."
Wisconsin taxpayer-funded projects should benefit Wisconsin, not Kentucky or Louisiana. We need stronger measures in place to keep Wisconsin projects with Wisconsin employers.
Wisconsin's Rainy-Day Fund Continues to Grow
Businesses, individuals and governments are impacted by the cyclical nature of the economy. When the economy weakens, business owners and individuals rely on reserve accounts, contingency plans and prudent spending to weather the downturn. Governmental entities rarely pursue this fiscally responsible approach. Thankfully, the State of Wisconsin is an exception.
The State of Wisconsin has a Budget Stabilization Fund and monies in the Rainy-Day Fund are set aside to provide state revenue stability during periods of below-normal economic activity. If actual state tax revenues exceed projected revenues, 50% of the additional tax revenues are required to be transferred to the Rainy-Day Fund.
Following the 2010 election, Governor Walker and the Republican-led Legislature pledged to build up cash reserves in the Rainy-Day Fund. They have fulfilled this promise.
According to the Legislative Fiscal Bureau, the balance in the Rainy-Day Fund grew from $16.6 million in fiscal year 2010-11 to $320.1 million in fiscal year 2017-2018. At the end of the state's current fiscal year - June 30, 2019 - the balance in the account will reach a record high of $617 million.
Over the next two years, the cash reserves in Rainy Day Fund are likely to grow. Neither the Governor nor the Republican-led Legislature have plans to draw money out of the Budget Stabilization Fund.
Supreme Court blocks 2020 census citizenship question
Ruling is setback for Trump administration
By Ariane de Vogue and Kate Sullivan, CNN
The bitter controversy centers around whether the administration can ask all recipients a citizenship question on the 2020 census for the first time since 1950 -- a move that could impact the balance of power in states and the House of Representatives, which are based on total population. Adding the question, critics say, could result in minorities being undercounted.
Writing for a 5-4 majority,
Chief Justice John Roberts
concluded that there was sufficient reason for concern about why the Commerce Department wanted to add the question. Roberts had the support of the four liberal justices.
Supreme Court allows partisan gerrymandering to continue
Ruling could have balance of power implications
By Ariane de Vogue and Devan Cole, CNN
Washington (CNN) -
Supreme Court said Thursday
that federal courts must stay out of disputes over when politicians go too far in drawing district lines for partisan gain -- a dramatic and sweeping ruling that could fundamentally affect the balance of power in state legislatures and Congress.
Chief Justice John Roberts wrote the 5-4 decision for the conservative majority.
"Excessive partisanship in districting leads to results that reasonably seem unjust. But the fact that such gerrymandering is 'incompatible with democratic principles' ... does not mean that the solution lies with the federal judiciary," he wrote in the gerrymandering opinion.
Construction Business Group | 608-240-4170 | www.cbgwi.com