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In a matter of weeks, the coronavirus pandemic turned life in Wisconsin upside down. Schools are closed. Sporting events and concerts are cancelled. And, huge segments of the economy are shuttered.
State and federal officials are still in the early stages of a policy response to the coronavirus pandemic. Their efforts have largely centered on slowing the spread of the virus and containing the economic fallout from massive shutdown orders and gathering bans. The CARES Act, passed by Congress in late March, will dispense $2 trillion in relief to workers, businesses, and states to weather what is hoped to be a brief economic shutdown.
With the federal response in motion, Wisconsin will move into the next phase of how to craft the Badger State’s policy response to the crisis. Governor Tony Evers and his administration have used executive power to suspend certain rules and regulations to address the emergency. We should expect this to continue, but the Governor should exercise restraint, especially when dealing with constitutional provisions. The state legislature also has a role to play and will need to move quickly.
A free-market coalition of the Wisconsin Institute for Law & Liberty (WILL), Americans for Prosperity-Wisconsin, the Badger Institute, and MacIver Institute have pooled their resources to provide some solutions and policy recommendations to assist the state’s workers and businesses, provide more certainty during the crisis, and spur a quick and lasting recovery.
Here are 7 recommendations, many with no cost, to help Wisconsin’s economy and workers.
Governor Evers’ moratorium on all “non-essential” businesses should be accompanied by a moratorium on all “non-essential” bureaucratic rulemaking orders. Regulations are new laws that impact the business community. Compliance with them costs money and time. But despite the current public health emergency and forced closure of businesses, state agencies continue to issue guidance documents, notice public hearings, and propose and implement new regulations. Policymakers can provide small businesses with economic relief and more certainty if it would put a simple moratorium on new regulations that do not directly address the crisis.
Arkansas Governor Asa Hutchinson issued an executive order that directs all state agencies to review their rules, identify any red tape hindering the coronavirus response and put those regulations up on their website. Such regulations will be automatically suspended by emergency order for 30 days. Wisconsin should adopt this efficient method of cutting red tape to respond to COVID-19.
During this crisis, it is imperative that supplies and goods move quickly and efficiently throughout the state. Yet examples of red tape from across the country that inhibit COVID-19 response include vehicular height, length, and width limitations and operator hours of service restrictions for those involved in response, restrictions on single use plastic products, and air quality regulations impacting the operation of critical medical sterilization facilities. Wisconsin must suspend any similar regulations that are inhibiting our ability to respond to the pandemic.
Home-based businesses strengthen local communities and are especially vital during times of economic dislocation and social distancing. But red tape makes it difficult to start your own business – permitting, occupational licensing, zoning, etc. Wisconsin should consider legislation or executive action modeled after Arizona’s 2018 Home-Based Business Fairness Act, which designates a category of “no impact” home-based businesses that can operate with a special permit or license. Under the law, these businesses that don’t disrupt the residential area they’re located in may operate without completing time-consuming permitting or zoning processes.
For workers that may temporarily reside in Wisconsin due to telework or otherwise, the result could mean a new tax liability. According to Wisconsin law, any nonresident individual temporarily in Wisconsin that happens to earn over $2,000 while working in Wisconsin and telecommuting is subject to Wisconsin’s income tax. Also, employers may now maintain a presence here if their workers are telecommuting, and could be subject to Wisconsin’s corporate income tax and individual tax withholding. This is especially relevant for businesses or workers who live near the state’s border. For tax purposes, Wisconsin should treat telework during the COVID-19 pandemic as temporary and continue taxing businesses as they were before widespread and temporary telework began.
The Wisconsin Work-Share program allows companies to avoid layoffs by curtailing hours and allowing affected employees to draw pro-rated unemployment insurance. While this program is typically used by larger businesses, the state should allow small- and medium-sized businesses to take advantage of the program during economic crises. This would allow employees to maintain employment during and following the crisis.
Despite being a state known for its beer, Wisconsin has a number of laws that severely limit the ability of people to access their favorite alcoholic beverages. This includes a ban on the sale of alcohol outside of licensed locations, and a prohibition on producers and retailers delivering alcoholic beverages with few exceptions. Some states have taken action already to allow for delivered alcohol during the outbreak. The Governor of Kentucky, for example, created a path for citizens over 21 to get home delivery of drinks in their original container. New York has taken a similar path. Wisconsin should follow suit.