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Spencer, Matt
From: Sent: To: Subject: thomasrhe~ Sunday, May 15, 2011 10:20 PM Rep.Kapenga; Rep.Kuglitsctl Statement on AB 129 and SB 94

Attachments: Statement on AS 129 and SB 94 Thomas R. Hefty May 16th.pdf Greetings, ! regret that I will be unable to attend tomorrow's hearin!Jon AS 129 and SS 94. Attached is my statement in opposition to the bill. As Waukesha County Republicans, I hope that you will recognize that this bill is contrary to free market principles. It will also disadvantage Wisconsin based insurers, including United Heartland headquartered in New Berlin. And on a very practical level, independent studies have shown the CAPCO incentives to be ineffective at job creation. Both Iowa and Minnesota have rejected similar proposals.
! hope that the committee chairs will distribute copies of my statement to the fuil Assembly and Senate committees.

Thank you for your attention to this matter. Please feel free to contact me a

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Spencer, Matt
From: Sent:

thomasrhefty
Tuesday, May 17, 2011 3:33 PM

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Rep.Kugiitsch; Rep.Kapenga; Sen.Zipperer CAPCO legislation pending in the state legislature

Attachments: Statement on AB 129 and S6 94 Thomas R. Hefty May 16thpdf

Greetings from California. Attached is a statement which I submitted yesterday to the joint Assembly and Senate hearings on the CAPCO legislation. Senator l.azich has withdrawn her support from the bill. The proposed $200 million tax cut is the largest single Wisconsin corporate tax cut in history. Yet it has received little attention and no debate in Waukesha County. The $200 million CAPCO cut compares to a total cost of $142 million in the January-February special session on jobs.

At least one Waukesha County insurer is disadvantaged

by tile bill, United Heartland in New Berlin. The proposed tax cut goes only to life insurers and to Q1lt-of-statecompanies. These companies would receive an 80% tax credit on their investments. This compares to only a 25% credit given to individual entrepreneurs and angel investors, people who invest in the very same companies as the favored corporate investors.

Similar legislation has been rejected in Iowa and Minnesota. I hope that the Waukesha County groups can consider this legislation at an upcoming meeting. Thank you. Tom Hefty

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Spencer, Matt
From: Sent: To: Mr. Hefty'

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Kuglitsch, Mike Thursday, May 19, 2011 2:36 PM 'thomasrhefty

Subject: RE: CAPCO Scam

Thank you for input regarding AB-129 the "Wisconsin Jobs Act" and I would like to commen ~ you for all your work on the "Be Bold Wisconsin" study. I agree with. your recor:nmendatlons In the stud y that Wisconsin is grossly lacking in Venture Capital to invest In WisconSin companies, which lea -cis me to question your dismay on this bill. This bill complements the existing Act 255 Angel inves,~ing program to. develop a cO~lprehet"') sive three pronged approach that addresses the "Valley of Death found In the Financinq Continuum. I authored an amendment to open the Tax Credits to all Insurance compa~ies that ~a! PrelrJium and Franchise taxes. I assume that would allow United Heartland the opportunity to participate l"f they choose. Please let me know your thoughts. Sincerely, Mike Kuglitsch

~----'-'-'---'-'-'---"-"--"---------'-'--'-------~ ...---~-.-..------ ..------- ..------.--------- ..--From: thornasrhefty Sent: Tuesday, May 17/2011 3:13 PM To: Rep.Kuglitsch Cc:lit!k : 2 lUg j I Subject: CAPea Scam

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Greetings, Thank you for taking the time to research the CAPCO .issue. You are probably ~war8 that Senator Lazich has withdrawn here support from the CAPCO portion of the legislation. She has also asked that her name be dropped as a sponsor of the bill. I would appreciate a response regarding the impact on the one insurance company headqu;artered in your district---United Heartland in New Berlin. This is the district. In Waukesha Wisconsin largest corporate tax cut in Wisconsin history. but it does not include any compafl'l in your fact, it places United Heartland at a competitive tax disadvantage. lt is puzzling to see a County Republican supporting a tax cut for out of state companies--but not a sin-tilar cut for companies.

I noted that you are speaking next week at a forum on venture capital. I will be back in WiSConsin and I will be interested to hear your opinions. Why do you differ from Senator l.azicn on this tax Cut? And wh you do .support a bill which disadvantages a company is your district. Who in your district SUpports this y legislation? If you research the CAPCO legislation in Iowa, you will discover that the Iowa governor vetOed the CAPCO bill. The rationale for the veto was two fold. First, the CAPCO tax subsidy was too large lth proven cost effective impact on job creation. Second, the CAPCO proponents had misrepresen'e;~h no bill to the Iowa legislature. That same misrepresentati~n has gone on in Wisconsin. Sadly, som'e 900~ Republicans have been taken In by the misrepresentations. I do not liv~ in your district, but! have been active in Waukesha County economic development. I se as the chair of the Waukesha County Economlc Development Corporation and as the interill] count rved executive of Waukesha county. I served as CEO of Blue Cross for seventeen years and we found Yd United Heartland in 1990. e SThank you for your attention to this matter. I look forward to receiving your response. Tom Hefty_

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Spencer, Matt
From: Sent: To: thomasrhe~ Sunday, May 22,2011 8:58 AM Rep.Kuglitsch; Rep.Kapenga

Subject: Fwd: More CAPCO research Greetings, please read the attached 2009 report on CAPCO's. The conclusion is priceless---Compared to CAPCO's, the state would be better off holding a raffle and giving the money away to entrepreneur raffle winners. The serious conclusion is the same as the 2010 Minnesota study which found "the Wisconsin CAPCO credit had little or no effect, likely displacing venture capital financing that would have otherwise occurred." In essence, Wisconsin wasted $50 million on the first CAPCO--and now proposes to waste $200 million more. Governor Pawlenty, now the leading Midwestern Republican presidential candidate, did not support the Minnesota CAPCO---it was rejected. The DC CAPCO plan had the same CAPCO managers as the 1998 Wisconsin CAPCO ----and the leading advocate for the 2011 $200 million Wisconsin CAPCO tax cut was one of the D.C. managers .. It is not conservative and not consistent with Republican principles to waste tax dollars---nor to pick winners and losers in Madison. Tom

-----Original Messa e----From: TomHeft To: TomHefty Sent: Sun, May 22, 2011 7:48 am Subject: Fw: More CAPCO research

Sent: Sunday, May 22, 2011 6: Subject: More CAPCO research Greetings, Here is yet another critical report on CAPCO's. This one is from 2009 and the hearing on the D:~. audit. The.Washington Post wrote some critical articles on the D.C. CAPCO,. and I hope that they Wid follow up WI,h a story on Wlscor.slrl---the good of the 25% angel credits, and the bad of the 80% credit for CAPCO's; and the opportunity for a fund of funds. Given Walker's national media attention, this should be a good story--about a $200 million tax cut on a failed CAPCO program at a time when the state is cutting important public programs. The conclusion of this District of Columbia study is similar to the 2010 Minnesota legislative study Minnesota and Iowa both rejected CAPCO's. .

http://poiicy.rutgers.edu/facultv/rubin/CAPCO%20testimonY.pdf

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Spencer, Matt
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From:
Sent:

thomasrheft~ Thursday, May 26, 2011 11:33 AM Rep. Kuglitsch

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Subject: Thanks

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Thank you for the invitation relayed thru your assistant t~ visit Madison to discuss venture capital. I regret that I can not join you, but I would be happy to talk with you on the telephone or to meet you for a cup of coffee. I encouraged your assistant to do a little web research on CAPCO audits in other states. Some of the Wisconsin specific CAPCO information was publicly disclosed for the first time at last Tuesday's legislative hearing. The Wilshire CAPCO had refused to provide any information for the Legislative Audit Bureau study in earlier years, but some of the Wilshire information was disclosed to the committee as an Appendix to Professor Nichols testimony. If you research that list of companies, you will understand the concern about the CAPCO model--and about the lobbyists who are promoting the CAPCO bill. I spent 30 years in the Wisconsin insurance industry, including being an insurance regulator under Governor Dreyfus. And I was the CEO of Blue Cross Blue Shield, when we moved our United Heartland subsidiary to New Berlin. It is a great community. Thanks again. Have a wonderful Memorial Day weekend, Tom

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Spencer, Matt
From: Sent: To: thomasrheft.~ Wednesday, June 01, 2011 2:28 PM Rep.Kuglitsch

Subject: Venture Capital Bill-Texas rejected GAPCO Bill Yesterday I have not heard from you, so I assume that you have reviewed all of the information provided on the advantages of a fund of funds prooosal=-and the disadvantages of the CAPCO's. The CAPGO lobbyists are spreading some mis-information regarding the fund of funds idea, and if you have any more questions, please feel free to call. It is still disappointing that you signed on a bill which disadvantages an insurance company in New Berlin. However, the GAPGO lobbyists have a national reputation for spreading misleading information, and unfortunately you were mislead by those lobbyists. The only new information today on CAPCO's comes from Texas. Yesterday, the Texas legislature rejected the expansion of CAPCO's in that state--a bill similar to what the CAPCO's presented in Wisconsin. You can find that news in the Austin Statesman. Instead, the Texas !egislature asked for a comprehensive audit of the CAPCO program, which would be a good idea for Wisconsin. Let me point out what the Texas action means. The state of Minnesota, lead by Governor Pawlenty, rejected CAPCO's in 2010 following a comprehensive study. The state of Florida, lead by another leading Republican governor, ended that state's CAPGO program. Now, the state of Texas, lead by Republican Governor Perry, has rejected the CAPCO expansion. These are three leading Republican governors--all rejecting CAP CO's. What does that tell you about the substance of the proposal? . Why would the Assembly Republican legislators jeopardize Governor Walker by pushing forward a discredited idea? Not only are they jeopardizing Governor Walker, they are jeopardizin'g the Republican Senators facing tough recall elections. Please let me know if you need any more information. Thanks again for reaching out tome for more information. Tom Hefty_

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Spencer, Matt
From: thomasrheft~~ Rep.Kuglitsch; Rep.Kapenga ""

Scnt:
To:

Sunday, June 05, 2011 7:37 AM

Subject: CAPCO Program


It was good to read in the Journal Sentinel that the $200 million CAPCO program is dead. Ninety (90%) of the money went to out of state insurance companies--putting Wisconsin insurers and Wisconsin jobs at a disadvantage. ' But there is an opportunity to save additional funds. $10 million of the original $50 million is missing. And $16 million of the original $50 million was not invested according to the state requirements. Recovering the $26 million would be a good start towards funding effective economic development programs. It would be good to see Waukesha money. Tom Hefty County Republicans taking the lead in recovering the taxpayer

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