Bill would help legislators’ businesses
Proposal scraps state tax on forgiven PPP loans
MADISON - Businesses owned by Wisconsin lawmakers stand to benefit from legislation they will take up Tuesday that would cut taxes for employers who received Paycheck Protection Program loans.
At least eight legislators or their families have an ownership stake in businesses that received PPP loans, records show.
Among them are Republican Assembly Speaker Robin Vos of Rochester and Republican Sen. Joan Ballweg of Markesan, who as a member of the Legislature’s Joint Finance Committee voted in favor of the tax cut on Wednesday.
The state tax cut could also help Democratic U.S. Rep. Mark Pocan of rural Dane County, who received a loan for his sign shop last year.
Congress created the program last year to help businesses and keep workers employed during the coronavirus pandemic. It gave out hundreds of billions of dollars of loans, but the loans did not have to be paid back if businesses kept their workers on their payrolls.
Aspects of the payments are not taxed at the federal level, but they are at the state level. Republicans who control the Legislature plan to soon pass Assembly Bill 2, which would cut taxes for PPP recipients, as well as those who participated in other programs.
In all, the legislation would reduce state revenue by $540 million over three years, according to the nonpartisan Legislative Fiscal Bureau.
That would help thousands of businesses across the state, including some affiliated with state lawmakers who will vote on the measure.
An ethics filing by Ballweg shows she or her family has a stake in the Ballweg Implement Co. in Waupun. The company received a PPP loan of $535,000 last year to help retain 47 jobs, according to a Washington Post database of loans.
Ballweg spoke in favor Wednesday of the effort to cut taxes for PPP recipients but did not mention her family business had received one. She said the program helped the tourism industry get through the pandemic but was flawed because of the rules requiring it to retain employees when business was down.
“They were caught between a rock and the hard place because their business crashed,” she said. “But by trying to get into the PPP loan, they were mandated to keep on employees that they didn’t need . ... From the beginning, it was a noble effort. Was it done perfectly? By far and away not.”
In a statement Thursday, Ballweg
“I owed it (to) my employees to give them stability during a tumultuous time. Now, we owe it to the over 90,000 employers around the state fighting to stay afloat and support their employees as well. I’m proud to support the federal alignments of our tax code to help our state’s economy fully recover.”
Sen. Joan Ballweg R-Markesan She or her family has a stake in Ballweg Implement Co., which received a $535,000 PPP loan.
said like others her family business sought help because of the pandemic.
“I owed it (to) my employees to give them stability during a tumultuous time. Now, we owe it to the over 90,000 employers around the state fighting to stay afloat and support their employees as well,” she said in her statement. “I’m proud to support the federal alignments of our tax code to help our state’s economy fully recover.”
Vos’ popcorn business, Robin J. Vos Enterprises, received a PPP loan of about $298,000 to help preserve 44 jobs, records show. Vos spokeswoman Kit Beyer did not immediately respond to questions Thursday, but in July noted Vos’ company was among hundreds of thousands across the country that received the loans to help keep people in the workforce as the pandemic walloped the economy.
Pocan received a $44,500 loan to preserve four jobs at his sign shop, according to a database maintained by federalpay.org.
As a member of Congress, Pocan voted to create the program and later voted to limit federal taxes on PPP loans. Pocan spokesman Usamah Andrabi said by email that Pocan “doesn’t have a position one way or another” on whether the state should also cut taxes for PPP recipients.
Republican Rep. Gary Tauchen’s family dairy farm, Tauchen Harmony Valley of Bonduel, received a loan of about $228,000, used to keep about 35 jobs.
Republican Rep. Cindi Duchow of Delafield or her family has a stake in Southport Marina Development in Kenosha, which received a loan of about $163,000 to retain 26 jobs.
Democratic Rep. Francesca Hong of Madison wrote on Twitter she would refrain from voting on the tax cut because the restaurant she owns, Morris Ramen, received a $65,000 PPP loan. She used 80% of the loan to cover payroll and the rest to help with rent, she wrote.
Republican Rep. Cody Horlacher’s small namesake law firm in Mukwonago received a loan of about $25,000 to help keep two jobs at his law firm, records show.
The Railroad Station, a restaurant partly owned by Republican Rep. Rob Brooks of Saukville, received a $20,000 loan to help retain jobs.
OpenHomes, a realty company founded by Democratic Sen. Kelda Roys of Madison, received a loan of more than $18,000 to help hang onto one job.
Roys said she supports having Wisconsin’s tax code treat PPP loans the same way the federal tax code does, but has not decided whether she will vote for Assembly Bill 2 because of other provisions in it.
She said she had checked with the state Ethics Commission and determined she can vote on the bill even though it affects her personally because it also affects thousands of other PPP loan recipients.
Tauchen, Duchow, Horlacher and Brooks did not respond to questions.