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Candidates clash over corporate tax loopholes and government spending

State Sen. Pat Kreitlow, D-Chippewa Falls, and 10th Senate District candidate Alison Page, River Falls, visit the Star-Observer office on Wednesday, Oct. 8. Photo by Randy Hanson1 / 2
State Sen. Sheila Harsdorf, R-River Falls, has represented the 10th District since 2001. She served in the State Assembly from 1989 to 1999.2 / 2

Tenth State Senate District candidate Alison Page announced her support for a plan to close tax loopholes and invest the money in highway projects and higher education during stops at western Wisconsin newspapers and television stations on Wednesday of last week.

"Wisconsin needs to make a serious investment in our economy to get it moving again," Page said during a visit to the Star-Observer office. "This is a job creation plan. (It's) not based on raising taxes, but on closing tax loopholes for large corporations and investing the money in a growth strategy."

Page was accompanied on the tour by State Sen. Pat Kreitlow, D-Chippewa Falls, the primary sponsor of the Wisconsin Invests Now economic development package that passed the State Senate last year, but wasn't given a vote in the Republican-controlled State Assembly.

Incumbent 10th District State Sen. Sheila Harsdorf, R-River Falls, was quick to characterize the Democrats' plan as a "tax-and-spend" scheme.

"Page is embracing a tax-and-spend agenda that leaves western Wisconsin out, but sticks us with a bill to help her special interest friends," Harsdorf was quoted as saying in a news release from her campaign.

The Harsdorf campaign charged that $50 million of the tax revenue in the Democrats' proposal would go to a commuter rail project linking Milwaukee, Racine and Kenosha to Chicago.

Page and Kreitlow said Republicans want to portray their plan as a tax increase, but it isn't.

"We're saying taxes are already too high on Wisconsin businesses that play by the rules," Kreitlow said. "We want a fair tax system set up."

He said current Wisconsin law allows corporations to open a mailbox in a state that doesn't have a corporate income tax and avoid taxes by claiming to be located there. The tax-avoiding method has been labeled "the Las Vegas loophole" by Democrats who want to close it.

"The real kicker is the disadvantage it puts small businesses at," Page said of the loophole. "I am extremely pro-business. But the business I want to support is the business that is being run by people who love this state and care enough to do the right thing for the future of the state. Not people who are doing a 20,000-foot flyover and looking for a state where they can do business and not pay their fair share of taxes."

Those companies, Page said, take advantage of the good things the state has to offer, but don't help pay for the infrastructure -- including a healthy, well-educated workforce.

Page said there are many national and international corporations that make a lot of money in Wisconsin but are able to avoid paying taxes here under current law. Meanwhile, small businesses and residents don't have the same loopholes available to them, and end up with an unfair share of the tax burden.

She said 21 states have already moved to close corporate tax loopholes.

"We're rather surprised that our Republican colleagues have been so adamant about protecting businesses that use a loophole to avoid paying for the infrastructure and the educated workforce that leads to their Wisconsin profits," Kreitlow said.

The Democrats' plan includes annual funding increases of $5 million for technical colleges, $50 million for state highway rehabilitation, $8 million in renewable energy loans and grants, $1.3 in additional financial aid for technical college students and $15 million in expanded child-care assistance to middle-income families.

Page pointed to a Wisconsin Taxpayers Alliance report in September saying that Wisconsin is falling behind other states in funding its university system.

The report said Wisconsin ranked 49th among states on higher education funding increases between 2003 and 2008. State funding for the University of Wisconsin system grew by 5 percent over the five-year period -- an average of 1 percent a year.

"We're losing faculty to other places. Surrounding states are investing more in higher education than we are," Page said. "We need to keep pace."

Harsdorf response

The Harsdorf campaign said the Senate Democrats' proposal has $180 million in "new taxpayer-funded spending."

"Alison Page has shown that she will fit right in with Senate leadership to support the same failed tax-and-spend schemes that have left our budget in a hole and taxpayers drowning," Harsdorf was quoted as saying.

The news release said "even Gov. Doyle" rejected the proposal.

"It is simply a partisan ploy to win favors with special interests that are wholly funding Alison Page's negative campaign," it quoted Harsdorf as saying. "Somebody needs to start asking questions of Alison Page about who is funding her campaign and why we should pay $50 million for a train in Milwaukee."

Harsdorf's campaign said members of the political action committee Building a Stronger Wisconsin would benefit from the Milwaukee-to-Chicago commuter rail project and have funded negative ads directed at the incumbent.

The campaign said Harsdorf supported a plan embraced by Gov. Jim Doyle, a Democrat, and the State Assembly that is fiscally responsible and relies on tax credits to stimulate economic growth and reward productivity.

Harsdorf also has worked with businesses in the region on providing affordable health care through cooperatives, according to her campaign. And she has authored legislation to expand the Manufacturing Extension Partnership program that helps small businesses improve productivity in order to keep and expand jobs, her campaign said.

"Just last week, Gov. Doyle was visiting to laud the success we had with bringing real jobs through technology zone tax credits at Air Motion Systems in River Falls," Harsdorf was quoted as saying. "Air Motion Systems came when we stood up to tax increases that Page supports and is now rallying behind. Her plans are a threat to jobs in this area."

Randy Hanson

Randy Hanson has reported for the Star-Observer since 1997. He came to Hudson after 11 years with the Inter-County Leader at Frederic, and eight years of teaching social studies. He’s a graduate of UW-Eau Claire.

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