Evers favors aid for states pinched for funds by COVID-19

Gov. Tony Evers on Tuesday said he would support federal legislation to help states make up for revenues lost as a result of the COVID-19 pandemic over the last several months.

“Clearly, revenue shortage is a major issue for us here in our state, but also every state in the union,” Evers told the Wisconsin Examiner during a telephone media briefing on the state’s handling of the pandemic. “And it directly impacts not only the economy of the state, which it clearly does, but it impacts the amount of resources that local governments rely on,” he continued. On the prospect of federal aid to offset those losses, “I do support that,” he added.

But Evers stopped short of criticizing 43 Republican lawmakers who in May wrote a forceful letter opposing federal aid to the states, accusing Illinois in particular of profligate spending before the pandemic set in and therefore undeserving of federal aid now regardless of their losses.

As first reported in the Wisconsin Examiner Monday evening, an inspection of records that the Small Business Administration (SBA) released Monday found that among the signers of the May 8 letter demanding that Congress not act to help states offset revenue losses were at least three lawmakers whose business operations had received Paycheck Protection Program funds from the SBA. One of those three as well as four other lawmakers have immediate  family members employed by companies or other organizations that were awarded PPP money.

Evers said Tuesday he didn’t know enough about the situation to react to the information that “some legislators are involved with organizations or companies or businesses that have PPP.”

Advocates for a federal aid package directed to the states point to similar legislation in 2008 that helped states weather the Great Recession despite plummeting revenues.

But the 43 legislators who put their names on the May 8 letter condemning the idea claimed that any such aid would “bailout reckless budgeting from other states.”

On Monday the SBA released two spreadsheets, one of all PPP recipients in every state who were awarded at least $150,000, and the other of PPP allotments under $150,000. The second list did not name the organizations receiving the funds, but just gave generic descriptions of each business and the community in which it is located.

The Examiner has posted a read-only copy of the spreadsheet of Wisconsin PPP recipients awarded $150,000 or more. The spreadsheet does not state the exact amount any organization received, only broad ranges of amounts.

The Examiner’s review of the SBA data found that the named PPP recipients included businesses owned or partially owned by three people who signed the May 8 letter:

• State Reps. Rob Hutton (R-Brookfield), owns and is CEO of Kettle Moraine Coatings in the Washington County community of Jackson. Kettle Moraine Coatings received between $350,000 and $1 million in PPP funds.
• Gary Tauchen (R-Bonduel) shares ownership of Tauchen Harmony Valley with family members. The  Shawano County dairy farm received between $150,000 and $350,000 under the PPP.
• Cindi Duchow (R-Town of Delafield), is listed in her state Ethics Commission filing as an owner of Southport Marina in Kenosha. Southport Marina Development Corp. received between $150,000 and $350,000 under the PPP.

In addition Duchow’s husband, Craig, is general manager and principal for Centerpointe Yacht Services in Milwaukee, which received between $350,000 and $1 million in PPP.

In their state Ethics Commission filings, four other lawmakers who took part in the May 8 letter have named as employers of immediate family members businesses or nonprofits that were granted PPP funds according to SBA data:

• State Rep. Rob Summerfield (R-Bloomer). He reports A-1 Express Trucking in Bloomer employs a family member; the business received $350,000-$1 million.
• State Rep. Cody Horlacher (R-Mukwonago). His wife, Karlee Horlacher, is a sales representative for Inpro Corp. in Mukwonago, which received $5 million-$10 million.
• State Rep. Mike Kuglitsch (R-New Berlin). His wife, Stephanie Kuglitsch, is a human resources specialist for Open Sky Education in Brookfield, which received $2 million-$5 million; Kuglitsch  works for Princeton Club, a fitness center in New Berlin that received $350,000 to $1 million.
• State Rep. Mike Rohrkaste (R-Neenah). His  wife, Deb Rohrkaste, is children’s ministry co-director for Calvary Bible Church of Neenah, which received $150,000-$350,000.

Legislator responds

In an email inquiry late Monday, the Wisconsin Examiner asked each of the seven legislators for their reason for objecting to aid to the states while having connections with organizations that benefited from PPP funds. The only one to respond was Rohrkaste, who spoke in a telephone interview Tuesday morning.

Rohrkaste says the church where his wife works announced recently that it would be returning its PPP loan “because they have been able to cover their expenses — they don’t need the money.”

But he distinguished between the PPP program — part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, passed in March — and proposals not yet passed to directly fund state governments.

“I wasn’t against the CARES Act in the initial funding,” says Rohrkaste. In signing the May 8 letter, “I was concerned about the federal government providing additional bailout money to states that have not been responsible.”

He reiterates the letter’s focus on Illinois as an example of out-of-control state spending. “Wisconsin has been fiscally responsible and balanced our budget over the last 10 years, and Illinois has not,” he says. “If you look at their balance sheet they are struggling dramatically even before the pandemic because they have failed to rein in spending.”

Rohrkaste, who will step down from his Assembly seat at the end of this year, says he’s not opposed to federal aid to states if it is targeted to such things as essential services, including help for “low-income people hit hardest by the pandemic.” 

But he calls for stringent controls on that funding. “States should be put under requirements to rein in their spending in other areas,” Rohrkaste says. “Our federal government has over a trillion-dollar deficit even before all of this money has been spent.”