March 3, 2009
The Honorable Jim Doyle, Governor
115 East, State Capitol
Madison, WI 53702
Dear Governor Doyle:
These are trying times for our state’s economy and rural Wisconsin is not exempt. As always, locally-owned cooperative businesses are playing an important role in revitalizing the rural economy and we are ready to do all we can to create economic stimulus to benefit the state as a whole.
Our members are currently working on a number of renewable energy projects, health care initiatives, infrastructure enhancements and other projects with great potential to create new markets, improve the health care system, and create jobs in rural communities where many of the cooperatives themselves were formed. Certainly your Administration has been helpful to these initiatives in many respects.
Unfortunately, Assembly Bill 75 includes a provision that will harm the cooperative system and will, as a result, significantly hurt our efforts to support the economy of Wisconsin’s rural communities.
As you know, cooperatives must, by law, distribute their profits to the member-patrons who in the present instance are purchasers of motor fuel. In 2008, our nation’s largest cooperative supplier of motor fuels returned more than $20 million in patronage dividends directly to Wisconsin members as cash or cash equivalents. The bulk of this money has been reinvested by cooperative members back into their local economy. Because of your leadership on rural initiatives, you have seen firsthand the positive role reinvestment can have on our rural economy.
The proposed oil gross receipts tax will drastically reduce, and in some years will eliminate, cooperatives’ patronage payments to the members from motor fuel sales. Patronage dividends are an important source of investment capital for local cooperatives as well as a source of deferred income for cooperative members. Cooperative members, in turn, often convert the patronage payments they receive into the consumer spending our state so urgently needs to spark a broader economic recovery.
Cooperative Network members have made it clear to us that we must strongly oppose the oil gross receipts tax and its inevitable tendency to drain away capital from rural ventures that could otherwise be helping to restart our economy.
Respectfully,
William L. Oemichen
President & CEO
Cc: Chris Patton
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