Economic/Workforce Development

Heart of the North – Economic/Workforce Development Committee


Current State of Northern Wisconsin (Barron, Rusk, Sawyer, and Washburn counties)

Why Heart of the North Economic Development is visiting Madison:

As a rural, grassroots group from northern Wisconsin, Heart of the North Days wants to increase awareness of issues that have uniquely, or especially, impacted rural areas. Most importantly, we hope to serve as a reminder that not all of Wisconsin revolves around Madison, Milwaukee, or Green Bay. This year, our Economic Development group would like to focus on workforce housing solutions, along with concerns around broadband rollout and mortgage lending availability.

To address the first point, our four counties have all struggled with attracting workers, in large part due to a paucity of workforce housing. Having workers invest in our communities through purchasing a home is a great way for them to come to love the area and stay. More to the point, our low-density communities make single-family homes the default option. Extending subsidized infrastructure will allow potential housing growth to take place. Areas of priority include current bills in the Legislature, Executive proposals, and Wisconsin Housing and Economic Development Authority policy.

For broadband and mortgage lending, we understand that much of the state and the country is facing the same issues. However, the rural situation is particularly dire, considering that other sources of community internet--such as businesses, libraries, and community centers--are much less accessible in rural areas. Consequently, as we lay out below, the current state of rural broadband access is much improved in recent years, but remains far from achieving the goal of making it a ubiquitous resource, just like electricity.

We thank you for taking the time to consider the following points and investing in listening to the ideas and suggestions of the north.

Highlighted Legislation

Assembly:

Assembly Bill 606[1]

- In the Committee on Housing and Real Estate: An Act to create 77.54 (70) and 234.47 of the statutes; Relating to: creating a sales tax exemption for materials used to construct workforce housing developments or to conduct workforce housing rehabilitation projects. (FE)

Assembly Bill 156[2]

- In the Committee on Ways and Means: An Act to amend 76.67 (2); and to create 71.07 (8f), 71.10 (4) (fd), 71.28 (8f), 71.30 (3) (cu), 71.47 (8f), 71.49 (1) (cu), 76.6395 and 234.46 of the statutes; Relating to: state workforce housing income and franchise tax credit and requiring the exercise of rule-making authority. (FE)

Both bills passed the Assembly on October 26, 2021 and were sent on to the Senate.

Senate:

Senate Bill 172[3]

- In the Committee on Financial Institutions and Revenue: An Act to amend 76.67 (2); and to create 71.07 (8f), 71.10 (4) (fd), 71.28 (8f), 71.30 (3) (cu), 71.47 (8f), 71.49 (1) (cu), 76.6395 and 234.46 of the statutes; Relating to: state workforce housing income and franchise tax credit and requiring the exercise of rule-making authority. (FE)

Senate Bill 631[4]

- In the Committee on Financial Institutions and Revenue: An Act to create 77.54 (70) and 234.47 of the statutes; Relating to: creating a sales tax exemption for materials used to construct workforce housing developments or to conduct workforce housing rehabilitation projects. (FE)

Both bills are in committee, having been amended in October and November of 2021, respectively. We hope that the Committee is able to continue action on these bills, as they both represent viable components of the solution to the inability for sufficient workforce housing to be constructed.

Planned Executive Actions

Governor Evers has called for multiple initiatives in the next state budget to address housing shortages. The state Joint Finance Committee is currently reviewing the proposals. Highlights include:

- Mixed-use tax increment districts (TIDs) could have a 60% share of housing instead of 35%. Workforce housing would be required to make up the 25% share increase.

- Increased funding from $42 million to $100 million for WHEDA’s tax credit program and an additional $50 million for local housing development funds.[5]

We are excited by both proposals, as they would help push needed support towards the programs that make housing investments feasible. In particular, expansion of tax increment districts is an important tool for rural areas to utilize in building out sufficient infrastructure for new housing development.

WHEDA Policies

We appreciate the support that WHEDA has shown to rural areas in making recent policy changes that have opened up funding for rural development. One example includes creating a fairer rubric with which to grade proposed rural developments which qualify under the spirit of WHEDA policies. We would like WHEDA to build on its progress and consider increasing the rural set-aside from its current rate at 25%.[6]

Looking at more general policy towards rural areas, we would like to mention that what “rural” means in Wisconsin can vary widely throughout the state. In fact, only nine Wisconsin counties are not more than 25% rural by land. Looking further at where special development zones for rural counties have been placed, all have been along the Great Lakes. While development of our shorelines is important, the middle of Wisconsin cannot be forgotten without great detriment to the future of our state. More targeted policies towards aging farming and forestry communities would go a long way in bringing more ideas to the areas falling furthest behind in Wisconsin.[7]

Need for Broadband

As noted before, rural areas have lagged behind the adoption rate of high-speed internet in more populous areas, mostly because of the high per mile cost of laying fiber optic cable to reach residents remotely located. However, this problem should not be construed as being limited to wildly remote areas; rather, 22% of rural residents in Wisconsin are unserved or underserved for their internet needs. That places Wisconsin 36th in the nation for rural broadband access. Most Wisconsinites like the Pack, but they do not want to be in the middle of it.

Of course, efforts to connect all of Wisconsin together will come at a cost: according to the Wisconsin Public Service Commission, $740 million to $1.4 billion more will need to be allocated to spend on broadband infrastructure investments.

Yet Wisconsin state government efforts have already accomplished a sizable portion of that goal. The Legislature approved $125 million from the last budget for broadband expansion. Gov. Evers set aside $100 million from the $2.5 billion given to Wisconsin from the American Rescue Plan Act--an additional $100 million from federal funding has also been set aside. Action today by our state government could see all Wisconsinites getting access to the technology that changes lives, transforms communities, and builds the future.

Objectives for our group:

We are hoping for continued support of the policies and actions listed above. New measures that will help address the struggles rural Wisconsin faces are critical. Coming out of Covid-19 and the increase in federal expenditures, with its strengthening of Wisconsin’s financial position, we wish that more resources can be allocated to making the Northwoods an economically-competitive area that attracts and maintains the resources to grow. While we are far from Madison, we hope that our interests as Wisconsinites are remembered year-round. Thank you for considering our ideas and recommendations.