Wisconsin communities benefit from $60 million tax on tourists
Three municipalities gather more from room taxes than property taxes

Wisconsin communities collected a total of $59.7 million in 2006 room taxes. Of that, $48.0 million was received by 225 municipalities and $11.7 million by the Wisconsin Center District (WCD) in Milwaukee. Total revenues have been growing, due to increasing tax rates and more communities using the tax, according to an exclusive new study of room taxes and tourism development available from the Wisconsin Taxpayers Alliance (www.wistax.org).

According to WISTAX, room taxes yielded over $1 million for each of seven municipalities, with Madison ($7.1 million), Lake Delton ($6.4 million), and Brookfield ($2.4 million) receiving the most. Another 17 garnered more than $500,000 in room tax revenues. These figures may be conservative, the study noted, because some municipalities report only “net” collections after administrative fees or distributions to a convention center.

Although room taxes ($59.7 million) were small compared to the $2.0 billion in municipal property taxes, they were a significant revenue source for some communities. Three collected more in room taxes than in municipal property taxes: Lake Delton (299 percent of the levy), the Town of Lyons in Walworth County (194 percent), and the Town of Anderson in Iron County (116 percent). Another 10 had room tax collections greater than 30 percent of their levy.

Room tax collections rose statewide from $12.6 million in 1987 to $59.7 million in 2006. Increases in both tourism and the number of taxing municipalities contributed to the growth. In 1987, 73 municipalities had a room tax. By 2006, that number had grown 208 percent to 225. During the 20-year period, an average of eight municipalities added the tax each year.

Room tax rates also increased during the period. In 1994, just over a quarter of municipalities surveyed had a rate greater than 5.0 percent. In 2003, 40 percent reported rates above 5.0 percent, and by 2008, that share was nearly 50 percent. Among the 31 that reported raising their rates from 2003 to 2008, the median (half higher, half lower) increase was 1.5 percentage points.

Although by state law at least 70 percent of room tax collections must be used for tourism promotion and development, qualifying expenditures and the use of remaining funds are determined locally. In some cases, room tax collections are placed in the general fund and used for both tourism promotion and general operating expenses.

Since tourism affects room tax collections, the WISTAX study also reviews the economic impact of tourists. The Wisconsin Department of Tourism estimated that 2007 visitors spent $12.8 billion in the state, 63 percent ($8.1 billion) from those staying overnight at hotels, motels, resorts, or bed-and-breakfasts.

The total economic impact of tourism was estimated at $7.1 billion, or 6.0 percent of earnings statewide (wages, salaries, and proprietors’ incomes). In some areas, tourism accounted for a substantial portion of local economic activity. Tourism accounted for 64.5 percent of earnings in Iron County, 55.5 percent in Vilas County, and 42.8 percent in Florence County—all substantially higher than the state average. Lack of other large industries in these areas contributed to greater dependence on tourist dollars and greater vulnerability to tourism trends.

University of Wisconsin Colleges and University of Wisconsin-Extension annual report identifies ROI for state’s stakeholders

Hundreds of thousands of Wisconsin residents benefited from the work of the University of Wisconsin Colleges and University of Wisconsin-Extension last year, thanks to investments by the state of Wisconsin, all 72 Wisconsin counties and dozens of public and private partners, says the joint UW Colleges and UW-Extension 2008 annual report titled Creating Returns on Investments.

“One investment that I am confident will yield ample financial returns for individuals,
businesses and the state is the University of Wisconsin Board of Regents investment in our mission of expanding access to higher education,” says UW Colleges and UW-Extension Chancellor David Wilson.

Wilson explained, “The board froze UW Colleges tuition for the 2007-08 academic year at 2006 rates. The result was the largest enrollment of students in the history of UW Colleges. Simultaneously, the UW Colleges retained its reputation as the most affordable entry point to the University of Wisconsin.”

Other notable contributions during fiscal year 2008:
• UW-Extension’s Cooperative Extension, Small Business Development Centers (SBDC), Wisconsin Public Television and Wisconsin Public Radio stepped forward during the spring 2008 floods to help families, farmers and small businesses get back on their feet.

• In support of the University of Wisconsin’s goal of increasing the number of bachelor’s degree holders in Wisconsin, the UW Colleges and UW-Extension’s Division of Continuing Education, Outreach and E-Learning reached out to adults statewide with information about how to start or continue their college education.

The complete annual report can be viewed online at the UW Colleges and UW-Extension Web site:  www.uwex.uwc.edu/publications; click on “2008 Annual Report.”

Quarles & Brady forms stimulus team

Quarles & Brady has formed a national Stimulus Legislation and Opportunities Task Force dedicated to assisting clients with evaluating and taking advantage of the opportunities arising under the American Recovery and Reinvestment Act of 2009.

The firm’s Stimulus Legislation & Opportunities Task Force is segmented into specialty areas in which the billions of dollars in targeted spending will have the most impact, including  municipalities, construction, funding for states, local governments and school districts, healthcare, American Indian tribal infrastructure projects, tax relief for individuals and businesses, and energy and science projects.

“The targeted investments in the federal bill, as well as state legislation designed to funnel federal funds to state projects, will have a direct impact on many of our clients as well as present enormous opportunity,” says Quarles & Brady chairman John Daniels.

The firm will be providing ongoing industry-specific, practical updates to clients, discussing developments regarding the programs and projects funded by the final stimulus legislation.

Wisconsin is an auto insurance center

Wisconsin, says Auto Insurance Report newsletter, has 4 of the top 10 U.S. auto insurance firms. No. 1 is American Family; No. 5, Acuity; No. 8, West Bend Mutual; and No. 7, Sentry. The regulatory environment has been very inviting, and Wisconsin consumers, like those in much of the Midwest, are loyal and don’t seem to be overly litigious, according to the newsletter. For consumers, the payoff has been low premiums, averaging $590 in 2006, far below the national average of $817, 7th lowest in the United States.

MOVERS

>> The Wisconsin Biotechnology & Medical Device Association, representing the state’s bioscience industry, announced the election of six new members to its board of directors. Marsha Barwick, director of marketing and investor relations of Marshfield Clinic’s Applied Sciences Division in Marshfield. Andy Bertera, vice president of global marketing at Madison-based Promega Corp. Paul Radspinner, president and chief executive of Flugen Inc. in Madison. Peter Sausen, vice president of program management services at Covance Inc. in Madison. Jim Tidey, president and chief executive of Waukesha-based GTI Diagnostics; and Michael Liang, vice president of Baird Venture Partners in Milwaukee.

>> Fond du Lac-native John M. Richter has been named senior vice president of the small business division of the Export-Import Bank of the United States