League of Wisconsin Municipalities
 Capitol Buzz 
May 28, 2015
Joint Finance Committee Votes to Insert Room Tax Law Changes into State Budget 

Despite receiving many contacts from municipal officials over the last two weeks, the Joint Finance Committee passed last night by a 9-7 vote a state budget amendment making changes to the room tax law sought by the Wisconsin Hotel and Lodging Association. The League strongly opposed this motion and thanks the many municipal officials who communicated with their state legislators about it.  Your efforts resulted in close vote. 


Three Republicans joined the four Democrats on the committee in voting against the motion. The seven legislators voting against were:  Reps. Kooyenga (R), Hintz (D), C. Taylor (D), and Senators Vukmir (R), Marklein (R), Erpenbach (D), and L Taylor (D).

The amendment affects communities differently depending on when they implemented a room tax and how they are currently spending room tax revenues on tourism promotion and development.

The amendment makes the following changes:

1. Eliminates municipal governing body discretion to spend room tax revenues directly on tourism promotion and development. The amendment  mandates that municipalities transfer the revenues designated for tourism promotion and development to a tourism entity or commission for spending.  

2. Modifies the 1994 grandfather clause by requiring municipalities that retain more than 30 percent of the room tax revenue for purposes other than tourism promotion and development under ordinances adopted prior to 1994 to reduce the amount retained
to the greater of 30% of current year revenues or the following dollar amounts:

a. in 2016, the same dollar amount retained in 2013.
b. in 2017, the same dollar amount retained in 2012.
c. in 2018 the same dollar amount retained in 2011.
d. in 2019 the same dollar amount retained in 2010.
e. in 2020 and thereafter, the same dollar amount retained in 2009.

The amendment also imposes new annual room tax reporting requirements for municipalities.  This includes a requirement that any municipality that collected a room tax prior to 1994 to file with DOR a copy of its room tax ordinance in effect in 1994 and a copy of the municipality's financial statement from 1994 showing the percentage of room tax revenue that the municipality retained for its own purposes. 

All of these changes take effect January 1, 2016. 

The League will be asking Governor Walker to veto these changes.  
Assembly Committee Recommends Passage of Legislation Repealing Prevailing Wage Law

Yesterday, the Assembly Committee on Labor voted 5-4  to recommend passage of AB 32, repealing the prevailing wage laws applicable to state and local public construction contracts.  While leadership in both houses has made clear that such legislation will not reach the floor or be inserted in the state budget, Governor Walker indicated yesterday that he would sign such a bill if it came across his desk. 

According to WisPolitics, Speaker Vos told reporters yesterday that he has been working with Senate Majority Leader Scott Fitzgerald to modify, but not repeal, the prevailing wage law. That includes increasing the threshold for the requirement to kick in and changing how the wage is determined. These changes may be worked into the state budget.