Walker unveils bills he says will help create jobs
Milwaukee Journal Sentinel
By Jason Stein of the Journal Sentinel
Jan. 4, 2011
Madison - Gov. Scott Walker on Tuesday laid out the details of his first bills aimed at getting Wisconsin residents back to work, including tax credits and a sweeping proposal to give businesses new protections from lawsuits.
The bills drew praise from the business lobby for bettering the state's economic development climate and criticism from environmentalists and trial lawyers for eroding plaintiffs' rights and endangering small wetlands. And as Walker started meeting with legislators about the bills, the top Assembly Republican lawmaker said some of the proposals Republicans will introduce could be passed in the Assembly in as little as two weeks.
"These five pieces of legislation will create a more stable tax and regulatory environment, so business owners can focus on growing jobs," Walker said.
Wisconsin Manufacturers & Commerce said the bills would make companies more willing to do business in the state.
"These are some of the big concerns of the business community: regulatory issues, legal issues and taxes," said James Buchen, WMC's top lobbyist. "We're very impressed that the governor has stepped up right out of the box and said we're going to do something on these things."
The biggest debate centered on the broad changes Walker wants to make in a complicated state liability law proposal. Walker himself said Tuesday he might have a more difficult time persuading large numbers of Democrats to vote for that bill.
Here are some of the proposed changes it contains:
• Plaintiffs would have to meet a higher threshold to receive punitive damages. Rather than show that the defendant showed intentional disregard for the rights of the plaintiff - the current standard - the injured party would have to show that the defendant either meant to harm the plaintiff or knew that his or her action was almost certain to cause harm.
• A plaintiff in a lawsuit must prove that a manufacturer actually made the product that harmed him or her. This provision responds to a controversial 2005 state Supreme Court decision that ruled a case against seven paint manufacturers could proceed even though plaintiff Steven Thomas could not prove who made the lead-based paints that he said poisoned him as a child. The lead paint industry went on to win the case at trial, but business groups have argued the high-court decision worsened the state's liability climate.
• Retailers generally would not be liable for manufacturers' defects in the products they sell.
• Plaintiffs who are drunk at the time of their injury would be assumed to have been injured because of the effect of the alcohol or drugs, not the product they were using. Plaintiffs could still show otherwise.
• Defendants in lawsuits found guilty of only a minority share of liability could be held liable for only that share of the damages rather than all of the damages. That could have a role in cases where there are two or more defendants but only one - typically a business - that actually has assets for which a plaintiff could sue.
• Damages to victims for pain and suffering would be capped at $750,000 in nursing home, hospice and assisted living home cases, extending to those businesses the same cap used for medical liability cases.
• Defendants would have an easier time recovering costs from plaintiffs and attorneys in frivolous lawsuits.
Fewer punitive judgments
Mike End, president of the Wisconsin Association for Justice, which represents the state's trial lawyers, said there are only a small number of product liability cases in Wisconsin each year and questioned whether changes to those parts of state law would bring jobs to the state. He said the changes could make it more difficult to recover damages in cases such as elderly patients injured in a nursing home, particularly punitive damages meant to punish a defendant for bad behavior.
"There's going to be less accountability. There's going to be less concern about injuring patients," End said. "It makes it almost impossible to get punitive damages."
Another Walker proposal would increase the Economic Development Tax Credit by $25 million. State officials said there was at least $75 million in the program already.
Zach Brandon, a deputy commerce secretary under Democratic Gov. Jim Doyle, said the program was effective in some cases but appeared to already have enough money.
"Putting additional funds into something already well-funded - I don't see that as a priority," he said, adding that money could be better used for other economic development programs.
Environmentalists also questioned a Walker proposal that could exempt environmental review of construction projects on small wetlands.
While details have not been released, the Wisconsin Wetlands Association raised concerns that Walker wants to weaken protections of wetlands that are less than 2 acres. The group says that the parcels provide important habitat for many native and migratory species.
Another bill would require a two-thirds vote by the Legislature to raise sales, income or franchise taxes. Any law passed, however, wouldn't bind a future Legislature seeking to raise taxes because lawmakers could simply rewrite the law.
Assembly Speaker Jeff Fitzgerald (R-Horicon) said he expected hearings on the bills as early as next week and floor votes on some but not all of the bills on Jan. 18.
Identifying waste: Also Tuesday, Walker announced a commission to find savings in state government.
Walker pledged on the campaign trail in August that the Governor's Commission on Waste, Fraud and Abuse would find $300 million a year in savings to help close an up to $3.3 billion shortfall projected for the state's 2011-'13 budget. Walker signed the executive order creating the commission on his first day in office Monday.
The commission will have seven members, with three appointed by the governor: two private-sector members, including the chairperson, and deputy administration secretary Cindy Archer, who served as director of administration under Walker's tenure as Milwaukee County executive. The commission will also include one Republican and one Democrat from each house of the Legislature.
The commission is scheduled to meet within about a week and begin digging into state agency spending and budgets. It will submit its findings and recommendations to Walker by July 1 and again on Jan. 1 and then will dissolve.
Gov. Scott Walker released details Tuesday on five bills that he says will help create jobs. The bills would:
• Rewrite laws to make it harder for injured plaintiffs to prevail against businesses in lawsuits.
• Give companies that move to Wisconsin tax credits equal to their income and franchise tax liability for their first two years of operation here. The credits could be used for taxes owed in subsequent years.
• Require a two-thirds vote by the Legislature to raise sales, income or franchise taxes.
• Provide a state income tax credit for contributions to a health savings account used by consumers to pay medical expenses.
• Increase the Economic Development Tax Credit by $25 million. The program provides businesses nonrefundable credits against their income tax liability for creating jobs and other steps to improve their businesses.
Patrick Marley, reporting in Madison, and Lee Bergquist, in Milwaukee, of the Journal Sentinel staff contributed to this report.