TUE AM News: Bill from GOP authors would expand a tax exemption for data centers; DHS says state could lose up to $16.8 billion under per-person Medicaid funding cap

April 29, 2025

— Republican lawmakers have been circulating legislation to expand a sales tax exemption for data centers.

Rep. Shannon Zimmerman, R-River Falls, and Sen. Romaine Quinn, R-Birchwood, last week sent a co-sponsorship memo to other legislators seeking support for the legislation. The proposal would extend the tax break from last session to data centers that may house a group of individual server computers that are owned by more than one business entity.

The lawmakers note the current sales and use tax exemption applies to data centers where a single owner, lessor or operator owns the server computers there. These typically serve a single user such as a large company, and are sometimes called “hyperscale” data centers.

In other cases, data centers lease out their computing power to business clients, which “effectively operate as tenants” of the computers, authors wrote. These data centers often cater to small and medium-sized businesses.

The lawmakers say offering the tax incentive to these kinds of data centers, the state will “have a greater opportunity to secure investments and economic activity” generated by these projects.

“Data centers create high-paying jobs and support upgrades to utilities and fiber network infrastructure,” they wrote. “It is critical for Wisconsin to not fall behind the competitive environment for data centers.”

The current tax exemption, certified by the Wisconsin Economic Development Corp., includes several criteria including a minimum qualified investment in the state over a five-year period. That amount is set at $50 million, $100 million or $150 million, depending on the population size for the county where the data center is located, the memo shows.

Along with modifying the law to say qualified data centers can include a group of individual server computers, as well as a group of networked computers, the bill has a provision related to cryptocurrency, analysis by the Legislative Reference Bureau shows.

Under the legislation, WEDC wouldn’t be able to certify any buildings for the data center tax exemption that “are used for or to facilitate the creation of cryptocurrencies” or the process of verifying and securing related transactions.

See the memo.

— State health officials say Wisconsin could lose up to $16.8 billion in federal funding if a per-person funding cap for Medicaid is implemented.

The state Department of Health Services yesterday released an analysis of potential state impacts from proposed funding cuts, including an $880 billion target budget reduction put forth by the GOP-led U.S. House of Representatives. The agency says major impacts to Medicaid and other health programs are “unavoidable.”

Under a loss of federal funding, Wisconsin Medicaid Director Bill Hanna says the state would have several options to fill the gaps, including finding more state dollars to offset the losses, covering fewer services, cutting provider rates and changing who’s eligible for Medicaid.

“So fewer people are eligible, which means the uninsured rate will likely go up,” Hanna said yesterday during an online briefing. “Uninsured rates going up means more uncompensated care in our health care infrastructure and hospitals and other providers … No matter what, because Medicaid is so important in the health care infrastructure, it will have impact on providers.”

Under the current funding structure, the federal government reimburses Wisconsin at a set percentage of eligible Medicaid costs. But DHS is warning that if Congress moves to change that to a set dollar amount per enrollee, the shift would “squeeze state budgets” and cause state taxpayers to shoulder the burden if medical costs go up quickly.

DHS notes Medicaid covers 20% of all state residents, including 40% of births, 38% of children and 60% of all nursing home residents.

The agency also warns of potential cuts to benefits and provider payments, with the state projected to lose up to $16.8 billion in federal funding if a per-person funding cap is put in place.

The Republican House Budget Committee’s fiscal year 2025 budget resolution calls for shifting Medicaid to a per-capita-cap financing model, under which the federal government would reimburse states for Medicaid costs up to a defined level for each beneficiary category.

Authors point to “rampant fraud” in the program as federal Medicaid spending has grown 51% between 2019 and 2023, reaching $616 billion. That’s projected to grow to $898 billion by 2034 based on Congressional Budget Office figures, the resolution notes.

“This unrestrained growth in Medicaid spending is unsustainable, piling billions more on to existing Federal deficits,” authors wrote.

Meanwhile, DHS says cuts to federal funding for administration of Medicaid programs would make it harder to effectively eliminate fraud, waste and abuse and operate these programs. The annual cost to Wisconsin of these Medicaid infrastructure cuts is estimated at up to $93 million.

The agency is also warning of new “red-tape” that could create obstacles to getting health coverage, such as work requirements. Hanna said these “additional burdens” would result in people losing coverage.

The agency says Wisconsin Medicaid enrolled about 191,000 adults without dependent children per month late last year, and about 52,000 of them would be “at highest risk” for losing eligibility under these requirements. The cost of adding Medicaid work requirements to the state is estimated at up to $65.6 million per year.

Hanna emphasized the current uncertainty around changes to federal funding levels, noting state officials and lawmakers on both sides of the aisle are trying to “read the tea leaves” about what will happen next.

“Until there’s more certainty, the focus is on getting the current state budget approved this summer,” he said.

See the DHS release.

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— The Advancing a Healthier Wisconsin endowment has announced $5.6 million in new funding for projects aimed at improving the mental health of workers.

This endowment, part of the Medical College of Wisconsin, says it will fund a “scalable, evidence-based strategy” for improving health workforce wellbeing, to be implemented by the Wisconsin Hospital Association. WHA is getting $3.2 million for the effort.

“By breaking down barriers to mental health support and adopting evidence-based strategies, we can strengthen Wisconsin’s healthcare workforce and improve care for the communities they serve,” Nadine Allen, chief quality officer for WHA, said in a statement.

Meanwhile, another $2.5 million will go toward a statewide professional services program for health care workers, administered by the Wisconsin Medical Society. WisMed will work with a group of other organizations such as the Wisconsin Nurses Association and the Wisconsin Dental Association to create the new program.

The Wisconsin Healthcare Professional Services Program, or WIHPSP, will provide confidential referral and monitoring for licensed health care professionals with behavioral or psychological challenges, as well as substance use.

WMS CEO Mike Flesher calls the grant a “vital step in creating a confidential program to support the health and well-being of Wisconsin’s physicians, dentists, pharmacists, physician assistants, nurses, and other providers.”

See more in the release.

— Green Bay Mayor Eric Genrich says he’s confident lawmakers and Gov. Tony Evers will approve more state funding to reimburse municipalities for public safety costs associated with the NFL draft.

“I feel good about it,” Genrich told WISN 12’s “UpFront,” which is produced in partnership with WisPolitics. “Really grateful to the governor for his inclusion of that funding in the state budget. A bipartisan group of legislators are also supportive of including that once the Legislature gets its hand on the budget. And so I’m hoping there continues to be agreement.”

He touted the economic impact of the event, but added “it doesn’t come without a cost.”

“Public safety folks who have been here for a long time will continue to be there throughout, a lot of folks working 16, 17 hours a day,” he said. “And so we’ve just got to make sure we pay them, and we’re committed to doing that.”

The Packers and local officials have projected a more than $90 million statewide economic impact, some $20 million in the Green Bay area alone.

“Checking in on attendance to see where that lands on those economic impact numbers, both within the region and statewide,” Genrich said. “But as long as people came here, had a great time, stayed safe, that’s the most important thing, and certainly on track in that regard…”

See more from the show.

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TOPICS

AGRIBUSINESS

– USDA cuts and tariffs create uncertainty

EDUCATION

– All 27 visa terminations at UW-Madison reversed

– Grants for students of color might end unless Supreme Court weighs in

HEALTH CARE

– Advancing a Healthier Wisconsin Endowment awards more than $5.6 million to support health care workforce

LABOR