Bruce Murphy
Murphy’s Law

The Sad Saga of Rep. Steve Nass

By - Sep 7th, 2001 09:51 am
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These are not good days for Rep. Steve Nass (R-Whitewater). A recent story on this website documented that he bilked taxpayers of nearly $2,000 since 1993 by exaggerating his mileage from home to the Capitol, claiming 52 miles rather than the true distance of 43 miles. But he could also end up owing thousands of dollars in federal and state taxes, and thousands more in interest payments.

At issue is a little-known part of federal law that allows legislators who live at least 50 miles away from the Capitol to claim expenses for any day the legislature is in session. The provision, found in section 162(h) of the IRS code, allows legislators to write off $98 per day, and uses a very generous interpretation of when the legislature is in session, including any period of four days or more between sessions. In short, if the legislature meets on Thursday and the following Tuesday, the legislator can charge daily expenses for that entire period, including even weekend days.

Privately, legislators say it’s a very lucrative provision, and it’s easy to see why. Take Nass, for instance. In 1999, he claimed 174 days serving in the legislature, and would have gotten $55 a day reimbursement from the state for this. Since both federal and Wisconsin tax law (which also follows the federal law) allowed him to claim $97 per day that years for expenses, he was left with an unreimbursed expense of $42 for each day the legislature was in session. Claiming this expense would give Nass a tax deduction worth $7,308. Depending on what other expenses he claimed and which tax bracket he is in, this would have lowered his state and federal taxes by somewhere in the neighborhood of $2,000.

Is Nass claiming this exemption? “I just hand it over to my accountant,” Nass told me. “The sheet that the [assembly] chief clerk does. The chief clerk prints out the road trip mileage”

That mileage report, however, is based on what legislators claim in mileage. The chief clerk, an earlier story here noted, requires legislators to fill out a notarized statement certifying their mileage to work, and Nass has, since 1993, claimed his trip from home to the Capitol is 52 miles long. But the true distance, according to measurements provided by both MapQuest and the American Automobile Association, is 43 miles.

If his accountant uses this paperwork to do Nass’ taxes, then the representative has incorrectly claimed expenses of a couple thousand dollars for the last eight years. “They can’t claim any expenses if they are less than 50 miles away,” says Tom Reed, a spokesperson for the Wisconsin Department of Revenue. “If he is incorrectly using this federal section [of the tax code], then he could be subject to an audit and there could be a correction.”

In addition, Reed, notes, a violator would have to pay 12 percent interest on the amount owed. Since Nass’ underpayment goes back eight years, his total back taxes and interest owed could total more than $20,000.

Kay Yezek, a local spokesperson for the Internal Revenue Service, says she believes the IRS would not allow a legislator to claim a roundabout route to the Capitol to get the mileage over 50 miles. Would this case arouse the interest of the IRS? “Well, yeah it would. Our criminal investigation department does take referrals. I guess at that point they’d have to review it and it would kind of depend on the potential [for financial recovery].”

Meanwhile, Nass continues to insist that he travels 52 miles to the Capitol. But he adds, “If the new chief clerk thinks it should be changed, I’ll go along with that.”

But Patrick Fuller, second-in-command to Assembly Chief Clerk John Scocos, says, “Nass hasn’t said anything like that.”

Scocos, meanwhile, has promised he is going to more closely scrutinize procedures in his legislative house. If there is a problem with a legislator’s mileage claim, he says, “We would check into it and make sure it was right.” Stay tuned.

THE SCHOOL BOARD IN TURMOIL: All bets are off as to what will happen to Milwaukee school superintendent Spence Korte now that school board member Donald Werra has announced his resignation. This leaves an evenly divided board that will have difficulty agreeing on anything, including the fate of Korte.

Korte has a two-year contract that was automatically renewed for two years, because the board failed to give four months notice of non-renewal prior to its expiration on May 26, 2001. It is state law that requires this four-month notice, but Korte’s contract only provides for 30-day notice, meaning the current board could get rid of him, contract or no contract, with just one-month’s notice. The contract further states Korte must then be given an administrative job at “salary level 15,” which ranges from $70,435 to $102,348.

Given the state law requiring four months notice, Korte, if fired, might argue he deserves more than 30 days severance pay. But since the contract he signs specifically references the state statute, it appears he willingly signed this right away. In essence, the “salary level 15” job would give Korte his old job back as principal. And given the turmoil on the board, that might not seem like such a bad idea.

Still, considering how hard it is to find strong candidates for superintendent, it is hard to imagine how a badly divided board could carry off such a search. Odds are Korte will stay, with some board members continuing to niggle away at his power and perogatives. But this is a very volatile board that could do anything.

Korte’s contract, by the way, is fairly Spartan in its provisions. He does get a leased automobile, but it’s a sensible Toyota Camry. He also gets computer equipment to be used as a home workstation, and five weeks paid vacation, a fine provision which we here at Milwaukeeworld wouldn’t mind getting.

LOSER BY A HAIR? One Republican predicts Tom Barrett can’t win for governor because he has that cute little mustache. “The candidate with facial hair never wins,” this pundit prognosticates. “[Former governor] Lee Sherman Dreyfus had that mustache, but it was so faint you could hardly tell.”

Barrett says he has no intention of shaving his upper lip or any other part of his anatomy. “Unlike Jesse Ventura, I will not be shaving my head.”

But isn’t he worried about losing some votes? “I think it’s time we had [a governor with a mustache] because we’re a beleaguered minority.”

Besides, he adds, “my wife has never seen me without a mustache. She might leave me if I took it off.”

Barrett says he’s had his mustache since he was “19 or 20.” Isn’t he curious to see if that upper lip is still there?

This article was originally published by Milwaukee World.

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