Sen. Roth: Lawmakers will discuss dark store loophole legislation soon

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GRAND CHUTE, Wis. (WBAY) - Legislation to close the state's dark store loophole might be back on the table in Madison.

State Senate President Roger Roth (R-Appleton) says he expects discussions to take place over the next several weeks to combine existing bills and possibly move them forward for a hearing.

As Action 2 News has reported, the loophole is designed to give big box retailers a tax break by allowing an operational store to be assessed based on the value of a closed property.

Local governments have asked the state to close the loophole, and
Gov. Tony Evers included a proposal in his state budget plan to do that, but it was taken out by Republican lawmakers who control the Joint Finance Committee.

On Tuesday night, Action 2 News was at the Grand Chute town board meeting during a heated exchange between Town Chairman Dave Schowalter and Rep. Mike Rohrkaste, a Neenah Republican who represents portions of Grand Chute in the Assembly and serves on the budget committee (see related story).

"I represent the citizens of Grand Chute," Schowalter told him.

Rohrkaste replied, "You're attacking my personal integrity."

The exchange came after Schowalter used the word "corrupt" in questioning why legislation to close the state's so called dark store loophole hasn't received a vote.

It's a question Action 2 News also posed this week to Senator Roth, who is a sponsor to one of the proposed bills.

"We've taken this issue from something nobody was talking about two years ago to one of the more higher profile issues facing the legislature right now," said Roth

"So being in a leadership position," we asked, "why can't you just get a vote on to the floor?"

"Pure and simple, I don't set the calendar," Roth replied. "I don't have that power. That rests with the majority leader."

In Grand Chute, town officials say the dark store loophole has led to more than $678,000 in tax money being refunded to several big box stores, and there's pending litigation from others.

Manawa Mayor John Smith says even small communities aren't exempt.

"It's affected our city budget, we've had to cut services," he said.

Just a few years ago Smith says the city's largest employer used the dark store loophole which resulted in a court settlement, giving the company a $10 million dollar tax credit and refund of roughly $300,000.

Like in Grand Chute, it's led to tension with state lawmakers.

Smith said about the process, "There is corruption. I don't care what anybody says. If you're not representing the people who elected you, you're representing the special interest groups, that's corrupt."

Sen. Roth responded to allegations of that nature by saying, "I just have to push back strongly on that, and nothing about this process deserves that kind of, that kind of language."

Both Smith and Schowalter have pointed fingers at the Wisconsin Manufacturers & Commerce (WMC) as well.

Cory Fish, WMC's General Counsel and Director of Tax, Transportation & Legal Affairs, write in a statement, “The so-called ‘dark stores’ loophole does not exist. It is a fabricated term created by local governments that want nothing more than to hike taxes on businesses. The truth is that overly aggressive assessors are illegally inflating the value on business properties in an effort to squeeze more revenue out of property owners.”

The WMC also wrote a letter demanding an apology from Schowalter for implying the organization is a corrupting influence.

Schowalter told Action 2 News Thursday night, "They should not hold their breath."

CLICK HERE to read the full WMC letter.