Wisconsin

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In September, Amazon announced its search for a second North American corporate headquarters, known as HQ2. The scale and scope of the project — the e-commerce giant is expected to invest more than $5 billion in the facility and employ up to 50,000 high-paid workers — captured not only headlines, but the attention of state and local officials.
A very public competition has ensued, and at least one Midwestern state, Illinois, is right in the middle of it.
“I’m excited about our chances for [landing] HQ2,” Illinois Rep. Mike Zalewski says. Earlier this year, he was part of an effort to reform and reinstate a long-standing Illinois incentives program known as EDGE, which is among the programs that the state could use in its pursuit.
“For every Amazon, there’s a lot more 40- or 50-person manufacturers looking to move to Illinois or to grow their business [here], and we want them to succeed,” Zalewski says. “EDGE is designed ... to help both the big fries and the small fries.”
The role of state incentives (tax credits, tax exemptions, grants, low-interest loans, etc.) has gotten increased attention in the Midwest during the latter part of 2017. In September, around the same time Illinois began making its Amazon pitch, Wisconsin was closing the deal on what lawmakers say is the biggest economic development project in that state’s history.

CSG Midwest
Stuck between the reluctance to raise taxes and the omnipresent need to fix transportation systems, legislators and governors may well feel the frustration of drivers caught in traffic. In Wisconsin, for example, Gov. Scott Walker and Assembly and Senate Republicans have been at odds over how to close an almost $1 billion deficit in transportation spending. Walker’s initial $6.1 billion transportation budget, unveiled earlier this year, included a $40 million increase in general transportation aid to local governments and $500 million in borrowing.
In early May, Assembly Republicans proposed raising gasoline taxes to pay for roads while significantly cutting income taxes over the course of a decade, moving from the state’s progressive income tax to a 3.95 percent “flat tax.” Their plan includes new fees on hybrid ($30) and electric vehicles ($125) and the elimination of tax credits aimed at homeowners. It also would cut the existing 30.9-cent per-gallon fuel tax by 4.8 cents while applying the 5 percent state sales tax to fuel purchases.
The Legislative Fiscal Bureau estimated those changes would increase revenue by about $380 million over the next two years, most of which would be used to reduce the borrowing that Walker proposes (from $500 million to $200 million) and to eliminate a transfer of funding from the general fund to the transportation fund.
Gov. Walker rejected the plan’s new sales tax on gasoline, saying it amounts to a new gas tax, but has indicated that he’s open to the tolling of interstates (another proposal from Assembly leaders), if such a plan brings in revenue from out-of-state drivers and is linked to a reduction in the gas tax.
A budget all sides can accept remained elusive as of mid-June. Absent a budget in place before the state’s new fiscal year began on July 1, funding would continue at current levels until one is approved.
Since 2012, six Midwestern states — Indiana, Iowa, Michigan, Nebraska, North Dakota and South Dakota — have raised gas taxes to provide additional transportation funding. Collectively, half of all U.S. states have enacted transportation funding packages since 2012 to make up for the erosion of gas tax revenues by inflation, says Joung Lee, policy director at the American Association of State Highway and Transportation Officials.
CSG Midwest
Some Medicaid recipients in Wisconsin will have to submit to drug screenings and tests if federal officials give the OK to a demonstration waiver submitted by the state in April. This new requirement would apply to childless adults who are eligible for health insurance through the BadgerCare Plus program. As a condition of eligibility, individuals would have to complete a state-administered questionnaire. If the answers indicate possible abuse of a controlled substance, a drug test would be required. For anyone who tests positive, Medicaid eligibility would be contingent on completing a substance-abuse treatment program.
CSG Midwest
At least 20 states, including five in the Midwest (see map), have enacted taxes on the “streaming” of media, such as music, movies or TV shows.
CSG Midwest
On March 10, Ohio became the first Midwestern state (and the second overall, behind New Jersey) to begin providing a safe place for newborns to sleep by offering “baby boxes” to all new parents.

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