Brief

Evers vetoes tax break on tuition that apprentices pay to outside groups

By: - December 6, 2021 12:45 pm
Student cuts wood

Photo courtesy of Madison College

Gov. Tony Evers has vetoed a tuition tax break for apprentices who have to pay for classes that are provided outside of recognized trade schools.

The legislation, SB-125, duplicates existing tax benefits, Evers stated in his veto message, “while leaving out important partners in Wisconsin’s apprenticeship system.” The governor took the action on Friday.

The proposed tax break was sought by Associated Builders and Contractors of Wisconsin (ABC), a trade group representing non-union employers and contractors.

Advocates for the legislation pitched it as providing a level playing field, claiming that apprenticeship program tuitions weren’t included in a state tax break for college and other post-high-school tuition. According to the state Department of Revenue, however, nothing prevents apprentices from receiving a tax deduction if they pay tuition to technical and trade schools that are already recognized under the existing tuition tax break.

The majority of construction apprenticeship programs in the state are jointly operated by unions and employers, and participants in those programs don’t pay tuition for classes they are required to take. The training programs, including classes at technical colleges as well as classes organized by the apprenticeship programs themselves, are funded by employers as part of the negotiated wages for union-represented workers in those trades.

ABC runs its own apprenticeship programs outside the joint union-employer apprenticeship system. Apprentices take some required classes through the state technical college system, but others are provided directly by ABC.

While the joint union-employer apprenticeship programs cover the tuition expenses for participating apprentices, the ABC apprenticeship programs charge the participating apprentices tuition for classroom time, either collecting the funds for its own training programs or passing them through to an outside provider.

ABC itself, however, is not a trade school — either in the state technical college system or an approved group of for-profit trade schools. Those already qualify a student for the state tuition tax break.

Some other state apprenticeship programs, such as in hair care and cosmetology, include technical college classes for which students pay their own tuition. Those apprentices are already allowed to use the existing tax break if the school qualifies under the current law.

In response to the veto, ABC issued a statement claiming that Evers “refused to treat apprentices the same as students pursuing bachelor’s and associate degrees for income tax deduction purposes.” The statement made no distinction between apprentices who already qualify for a tax deduction under current law and those who don’t.

While the legislation had some bipartisan support when it was introduced, Democrats who originally supported it dropped their names from the bill and all but one Democrat in the full Legislature, state Rep. Deb Andraca (D-Brookfield), voted against it.

John Schmitt, president and business manager of the Wisconsin Laborers District Council, welcomed the veto. In a statement, Schmitt called the bill “a lopsided state subsidy” that “discourages private investment in worker training.”

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Erik Gunn
Erik Gunn

Senior Reporter Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.

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